King of beer deals: Anheuser-Busch takes InBev's $52B offer

Anheuser-Busch BUD accepted a $52 billion cash offer from No. 2 brewer InBev late Sunday after weeks of legal maneuvering.

Talks about a $70-per-share buyout of Anheuser-Busch by Belgian InBev, which makes Stella Artois and Beck's, took place through the weekend in New York, said people familiar with the negotiations who declined to be named because the official announcement hadn't been made.

As part of the deal, Anheuser-Busch will get two seats on the board of the combined company, which will be called Anheuser-Busch-InBev, the people said.

W. Randolph Baker, Busch chief financial officer, had earlier said it is company policy to not confirm or deny rumors of possible deals.

On June 11, InBev made an unsolicited proposal to Anheuser-Busch CEO August Busch IV for a $65-per-share, all-cash buyout. A-B snubbed the offer weeks later saying that it undervalued the company. Busch has nearly half of the $90 billion U.S. market, the world's biggest, with its Bud Light, Budweiser and Michelob brands.

The company initially used its position as the leading American brewer to rally politicians and residents in St. Louis, where Anheuser-Busch is based, to oppose a buyout by a foreign company.

"It's really all about the money, despite the flag-waving and posturing," says Juli Niemann, an analyst at Smith Moore & Co. in St. Louis. "Getting a little more on the table is getting everyone to be friendlier."

Busch shares closed Friday at $66.50, up $5.29, on reports that a deal was close.

The two companies may have felt pressured to get a deal done before the November presidential election. Wall Street sentiment is that if presumptive Democratic nominee Barack Obama wins, regulatory clearance could be more difficult to get.

"They don't want to hang around with a new Department of Justice. That's why they are pushing this through," says Robbert Van Batenburg, an analyst at Louis Capital Markets in New York. "The same goes for the Busch family, which risks that capital gains (tax) may go up and (they'd) miss out on millions of dollars of profit. "

An InBev and Busch deal will create the world's leading brewer, with worldwide volume of 357 million barrels and $36 billion in revenue. No. 1 SABMiller, with more than 200 million barrels and $21.4 billion in sales, recently got regulatory approval to combine its U.S. operations with Molson Coors.

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