St. Louis Post-Dispatch from St. Louis, Missouri • Page A007

end of the year. InBev said it had financing. changes Morningstar analyst Ann Gilpin said. combination will be a very formidable Bent on acquiring the biggest U.S. brewer and its collection of brands, breweries and well- entrenched distributors, InBev sweetened its bid for Anheuser- Busch to $70 a share after offering $65 a share on June 11.

By comparison, average share price for the 12 months before news of the deal surfaced on May 23 was about $50. The stepped-up price apparently helped pushed the deal over the top in negotiations late this week. is truly one of those win-win situations where everyone should be pleased as said Tom Pirko, president of California consulting rm Bevmark. InBev CEO Carlos got what he wanted took down the big prize. And (Anheuser-Busch) shareholders got a major premium that would have been in doubt for a long time to The agreement followed about a month of resistance from Anheuser-Busch, which blasted the initial proposal of $65 a share equal to about $47.5 billion as inadequate and not the true value for the assets in key markets such as the U.S., China and Mexico.

InBev argued that the deal was the next progression in a relationship that stretches back 28 years, thanks to brewing arrangements in Canada. The companies now also cooperate in South Korea and the U.S., where Anheuser-Busch imports Stella Artois, and other InBev brews. The paths have crossed before, under different circumstances. Back in 1999, Anheuser-Busch had plans to make a bigger splash in Brazil and the broader South American beer market. The company had a minority stake in Antarctica Paulista, No.

2 brewer, and hoped to take majority control. But Brahma, biggest beermaker, persuaded authorities to let it merge with Antarctica, creating a new company called AmBev. Anheuser-Busch sold its stake and watched as AmBev proceeded to merge with Belgian brewer Interbrew to become InBev. Since then, InBev has established a reputation as one of the beer most audacious takeover machines. Executives have coveted potential for a long time perhaps 20 years and their ambitions go well beyond short-term earnings potential, said Gilpin.

thinking about the next 100 she said. On Wednesday, Brito told the Post-Dispatch that the proposed deal with Anheuser-Busch was a buyout of Anheuser- Busch could prove revolutionary. The combined company will churn out about 392 million barrels of beer a year, about 60 percent more than rival SAB- Miller. Anheuser-Busch InBev will boast sales of about $36.4 billion. The combined companies aim to save $1.5 billion in costs annually by 2011.

About 40 percent of the combined revenues will come from the U.S., where all of 12 breweries are to remain open. St. Louis will be the North American headquarters of the combined companies. Analysts expect the deal to set off another round of buyouts and takeovers as brewers try to keep up and compete with size never before seen in the beer industry. The combination will give the new company a platform to build the Budweiser brand outside the U.S.

as well as scale to wrest more clout with vendors, Brito said during the interview last week. going to have more importance to suppliers, developers of technology, raw he said. are a lot of things we can do together much But the deal seemed anathema for many supporters of An- heuser-Busch in St. Louis, who feared that InBev would prove a harsh taskmaster and wipe out habit of charitable donations and generous pay and benefits. Many residents were disinclined to believe assurances that he harbored no hidden agenda.

congressional delegation and St. mayor made known their opposition to the buyout. Similar hostility popped up as far away as Newark, N.J., where last week a sign hung on a fence near brewery implored: Budweiser InBev itself is making a major bet that it can make the $52 billion investment pay off. The wager is that Budweiser can be turned into an even bigger global brand with a big presence in places such as Argentina, Bolivia and the Ukraine. Plus, the deal will help InBev reduce its reliance on Brazil and other high-growth but somewhat volatile markets.

The U.S. beer market of which Anheuser-Busch controlled 51 percent at the end of March is growing slowly but still represents the big- gest pool of ts for brewers. InBev has built its business largely on relentless cost-cutting coupled with a string of acquisitions. But InBev executives have insisted that the main appeal of buying Anheuser-Busch was potential increases in revenue. They have been largely silent on the magnitude of cost cuts that Wall Street and Main Street expect to follow.

is almost going to be like of the Body Pirko said. new company is going to be very different. going to have a very different Asked whether he thought wholesalers were as cient as they could be and whether he would shake up the network of 600 beer wholesalers Brito demurred. would change the top he said last week. 314-340-8372 314-340-8320 314-340-8140 Philibert Security Locally owned monitored for over 35 years.

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LOUIS POST-DISPATCH STLTODAY.COM A7 The world's No. 1. German beer, Beck's is perhaps InBev's best-known brand in the United States. It is always brewed in accordance with a 16th-century German Purity Law, even as brewing operations have expanded to eight countries. BRAHMA This Brazilian lager is the world's fifth-best-selling beer by volume, though it has until recently been focused in Latin America.

Non-Latin American sales increased 48 percent in 2006 as InBev beefed up its global distribution. LEFFE A traditional Belgian abbey ale, Leffe is the most recent addition to InBev's global portfolio. It is less widely available in the U.S. than InBev's other global brands, but its sales volume has doubled in the last decade. SKOL Skol is the world's third-best selling beer by volume, after Bud Light and Budweiser.

It is primarily sold in Brazil, where it is the nation's most popular brand and corners almost one-third of the market. STELLA ARTOIS It traces its roots to 1366, in InBev's hometown of Leuven, Belgium. Stella Artois has seen fast growth in the U.S. in recent years and today is available in 80 countries. In bars, it's often served in its distinctive gold-tipped chalice glass.

BUDWEISER This classic American-style lager has been Anheuser-Busch's flagship brand since 1876. It is the world's second- best-selling beer, trailing only its lighter cousin. Around the turn of the last century, it became a major national beer brand in the U.S. and is still renowned as "The Great American Lager." BUD LIGHT The world's best-selling beer, Bud Light has grown faster in recent years than any other top-10 brand and makes up 53 percent of all "premium-light" beer sales in the U.S. It widely sponsors major U.S.

sporting events and is renowned for humorous marketing campaigns. BUSCH A-B's first new brand after Prohibition, Busch and Busch Light have grown to become one of the top "value" brands in the U.S. Well-known for its long-running "Head for the Mountains" ad campaign. MICHELOB A-B sells a wide range of high-end beers under its Michelob label, from its traditional European-style Michelob lager, to several craft-beer varieties to its fast-selling low-carb Michelob Ultra. NATURAL LIGHT Anheuser-Busch's first light beer is still its third-best-seller and the leading "value" brand in the U.S.

InBevAnheuser-Busch Anheuser-Busch and InBev own some of the biggest names in beer. A combined company would control more than one-fifth of global beer sales, according to market research group Euromonitor. A POWERFUL COMBINATION A-B board bows to InBev, OKs sale A GLOBAL BREWING GIANT The combination of Inbev and Anheuser-Busch would create the largest beer company, with brewing operations around the globe. InBev Both companiesAnheuser-Busch 3 Stir: a free e-mail newsletter sent to your in-box each weekday; features fun and quirky news of the day. Sign up by logging onto STLtoday.com and clicking on the up for e-mail link.

Quirky Fun Fresh 6 Recycling For A Positive Future Abitibi Paper Retriever For More Information 314.381.3700 For More Information: 314.381.3700 PaperRetriever.com DEAL FROM A1 ANHEUSER-BUSCH COS. Brewery founded: 1852 Headquarters: One Busch Place, St. Louis Chief executive: August A. Busch IV 2007 Sales: $16.7 billion 2007 $2.12 billion Total employees: 30,849 Local employees: 6,000 Key products: Budweiser, Bud Light, Michelob, Busch and Natural beers InBev Brewery founded: 1366 Headquarters: Leuven, Belgium Chief executive: Carlos Brito 2007 Sales: $23 billion 2007 $4.86 billion Total employees: 89,000 Key products: Stella Artois, Brahma, Leffe beers Note: Sales, gures converted at exchange rate..