June 16, 2008 3:03 PM ET, BizJournals.com
Warren Buffett, the world's richest man and chairman of Omaha, Neb.-headquartered Berkshire Hathaway Inc., is planning to speak this week with Anheuser-Busch President and CEO August Busch IV about Belgian brewer InBev's proposed $46.3 billion takeover offer of A-B, according to media reports.
Berkshire Hathaway owns more than 35.3 million shares, or 4.9 percent, of Anheuser-Busch stock, and is believed to be the brewer's second-largest shareholder behind the 5.7 percent held by Barclays Global Investors NA of San Francisco. Berkshire Hathaway's stake in A-B is worth nearly $2.3 billion at the current offer price of $65 per share.
The Business Journal reported June 6, before InBev formally extended its takeover bid, that if Buffett sees a valuable opportunity in a deal between InBev and Anheuser-Busch, it is possible he could take an active and influential position in the negotiations.
On April 28, he played a critical role in the acquisition of another venerable, family-run public company when he partnered with privately held candy maker Mars Inc. in a $23 billion joint bid for Wm. Wrigley Jr. Co., the Chicago company behind such famous chewing gum brands as Doublemint, Big Red, Juicy Fruit and Orbit.
"Mr. Buffett, who holds a 5 percent stake in Anheuser-Busch Inc., has a notable reputation for assisting in matters where family ownership is at stake," said Adolphus Busch IV, an uncle to August Busch IV and a company shareholder, in a statement. "His participation in the recent merger of Wrigley and Mars Inc. is evidence of his integrity. Should Mr. Buffett see this merger as a positive action for all shareholders involved, the likelihood of a deal will increase enormously."
Research firm Gimme Credit issued a note Monday morning that said, "If Mr. Buffett makes any public statement in support of InBev's bid, it's game over for the Busch family's takeover defense efforts."
Ann Gilpin, an analyst with Morningstar in Chicago, said Buffett's involvement shows the enormous amount of pressure on A-B's board from the company's shareholders.
"Warren is probably on the side of the table that he wants the deal done," Gilpin said. "You are not going to get a price like this on a stand-alone basis."
Per company policy, A-B does not confirm, deny or speculate on rumors of potential investments, acquisitions, mergers, new business partnerships or other transactions.
Click here for the main story on InBev's takeover offer.
St. Louis-based Anheuser-Busch Cos. Inc. (NYSE: BUD), through its Anheuser-Busch Inc. subsidiary, is the leading domestic brewer, holding a 48.5 percent share of U.S. beer sales. The company also manufactures and recycles aluminum cans and operates theme parks.
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