Takeover to create world's biggest brewer

Budweiser brewer Anheuser-Busch today agreed a US$52bn (€32.7bn) takeover bid from Stella Artois maker InBev.

The deal will create the world's biggest brewer, to be called Anheuser-Busch InBev, leapfrogging the current brewing number one, Peroni-maker SABMiller. The new firm will also be one of the world's five biggest consumer firms.

It follows a month-long pursuit of Missouri-based Anheuser by Belgian giant InBev, whose initial US$47bn (€29.6bn) bid was rejected as too low.

InBev's chief executive, Carlos Brito, has been named as the chief executive of the new company.

He said: "We are extremely excited about the opportunities that this combination will create for consumers worldwide."

Cost savings of US$1.5bn (€945,479) have already been identified as a result of the combination.

In what has been seen in some quarters as a concession to US political concerns, Budweiser's headquarters will remain in St Louis, Missouri, while none of Anheuser's US breweries will be closed.

InBev, which also makes the Becks and Staropramen brands, is currently the world's second-largest beer-maker behind SABMiller. Anheuser-Busch is by far the largest brewer in the United States with more than 48% of the market share.

Based on current figures, the new company would produce 46 billion litres of beer globally every year, with sales of US$36.4bn (€22.9bn) and earnings of US$10.7bn (€6.7bn). Around 40% of revenues would be earned in the US.

The deal, in which Anheuser-Busch shareholders will receive US$70 (€44.1bn) a share, will need the approval of US regulators.

August Busch IV, Anheuser Busch's president and chief executive, said the tie-up would create "certain value" for the firm's shareholders, as well as enhancing "global market access" for Budweiser.

The takeover would be the latest round of consolidation in the brewing industry, which has been facing challenges from rising raw material costs and changing drinking habits.

Foster's and Newcastle Brown Ale brewer Scottish & Newcastle fell into the hands of European giants Carlsberg and Heineken this year.

The Anheuser brewing name dates back to 1860 when Eberhard Anheuser acquired the Bavarian brewery and renamed it E Anheuser & Co. His son-in-law, Adolphus Busch, joined the company in 1864 and it was eventually renamed Anheuser-Busch.

The company survived Prohibition by selling products ranging from ice cream to root beer.

InBev saw its beer volumes in its main Western Europe region decrease by 4.9% last year, while underlying profits from the region were down 7.5% to €771m.

However, the company enjoyed strong sales in booming markets such as Eastern Europe - where volumes were 13.7% up - and Latin America, which saw growth of nearly 10%.