Helia Ebrahimi, Financial Mail
25 May 2008, 10:34am
Warren Buffett, the world's richest man and most successful investor, is believed to be making secret moves to push for a £50bn merger between the two biggest brewers - InBev, which makes Stella Artois, and Anheuser-Busch, producer of Budweiser.
|Mega merger: Warren Buffett |
Consolidation among the big brewers has long been expected. Only last month Heineken and Carlsberg finalised their joint bid for Scottish & Newcastle while SABMiller acquired Grolsch of the Netherlands and signed a lucrative joint venture with North American partner Molson Coors.
News of merger talks between the two brewing giants emerged just ahead of the Bank Holiday weekend, allowing Anheuser-Busch to undertake negotiations behind closed doors without having to reveal too many details to the stock market.
In particular, InBev wants the chance to woo the support of the founding Busch family. It will also want to win the backing of the Modello family, which owns the £10bn Corona brand, where Anheuser-Busch has a 50% stake.
Senior advisers hope to present terms of a deal to Anheuser-Busch shareholders on Tuesday.
Buffett's considerable political and diplomatic sway will be crucial to negotiations. However, insiders say the deal faces considerable hurdles, especially in such a tough market.
It has been suggested that if InBev again fails to win support for a bid from Anheuser's directors, it may turn its attentions to SAB Miller.
But sources close to senior SAB executives this weekend said the company would be likely to resist such a move as they regarded InBev as a 'slash and burn' company with totally different business objectives.
The source did not rule out the possibility that 'high-level contacts' between the two companies had taken place.
A takeover of Anheuser-Busch would give InBev control of about a quarter of the world's beer market. InBev has already secured a £25bn finance package from Spain's Santander and JPMorgan of America to fund the acquisition. It is thought the company will launch a £5bn-plus rights issue next year.
Shares in Anheuser-Busch gained 6% on Friday while InBev stock dropped 3%.Share Investor Business News- Get more business news
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