St. Louis bids farewell to local A-B ownership

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ST. LOUIS: Few American cities are as closely linked to a company as St. Louis is to Anheuser-Busch, making for a difficult day for some here when Belgium-based InBev closed its $52 billion buyout of the brewer.

The Anheuser-Busch-InBev combination, which was completed on Tuesday, creates the largest beer company in the world, and one of the top five consumer product companies.

St. Louisans have had months to grow accustomed to the deal, but word that the brewer would no longer be locally owned still raises worries about what that will mean for the region's economy — and its psyche.

The brewer employs about 5,700 people in the St. Louis area and pays roughly $32 million in state and local taxes and fees. Anheuser-Busch donated about $13 million to philanthropic and charitable organizations last year.

The company said in a statement Tuesday that it has not made any additional changes to its work force, adding that "InBev has affirmed its commitment to the community." St. Louis will remain the North American headquarters for the company.

Brewery tours that draw hundreds of thousands of visitors annually to the red-brick Anheuser-Busch complex in the Soulard neighborhood are expected to continue, as are symbols long associated with the brewery, like its famed teams of Clydesdale horses.

Robert Archibald, president of the Missouri Historical Society, said he has heard people are worried about "the loss of one of the last St. Louis icons," but he thought the city's strengths will allow it to "do just fine."

Brewing has historically been an important industry in St. Louis, brought about by waves of German immigrants who came to the region before the Civil War. Beer, which would not have been pasteurized at the time, was often stored underground in area caves to keep it cold.

Anheuser-Busch had its roots in the Bavarian brewery, which Eberhard Anheuser acquired in 1860. His son-in-law, Adolphus Busch, in 1864 joined the company that would later become Anheuser-Busch.

There used to be dozens of breweries in St. Louis, but Archibald noted Anheuser-Busch developed its reputation through its marketing genius.

In St. Louis, the brewery's name is commonplace, glowing on signs at Busch Stadium where the major league baseball Cardinals play and marking the business' many corporate sponsorships of area programs and events.

In Archibald's view, there was a certain inevitability that the long-standing business, closely associated with a family, would change into a larger company and operate on a global scale.

But all the economic realities in the world can't sway St. Louis residents, for whom the loss of local A-B ownership feels personal.

"It's kind of a shame we're losing local control of it, but I expect I'll still like the beer," said Jerry Venverloh, 85. He and classmates from his 1937 graduating class from Our Lady of Sorrows elementary school gathered there for lunch.

Venverloh said he expects changes will come to the brewery in St. Louis, including a reduction in jobs, now that the deal is complete.

"In my working life, I've been in situations where new owners come in, and say they'll keep everything the same. Six months later, everything changes," he said.

St. Louis Mayor Francis Slay said the company's chief executive, Carlos Brito, phoned him Tuesday afternoon. Brito said he and a team of employees will spend several months making changes at Anheuser-Busch, but Slay sounded a positive note.

"Closing the Anheuser-Busch InBev deal, of course, means that thousands of St. Louisans will now be sharing one of the largest infusions of wealth into this region in our history," Slay said in a statement. "Given the state of the national economy, it probably could not come at a better time."

AB Inbev says it will cut 1,400 US jobs

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BRUSSELS (AFP) — Newly merged brewing giant Anheuser-Busch InBev said Monday it would cut 1,400 jobs in the United States as part of its recently closed takeover of Anheuser-Busch.

The Belgium-based brewing giant also said it would not fill 250 US positions and that 415 contractor jobs would be eliminated.

"To keep the business strong and competitive, this is a necessary but difficult move for the company," Anheuser-Busch President David Peacock said in a statement.

"We will assist in the transition for these employees as much as possible," he added.

The cuts, which will affect about six percent of the company's US workforce, would come at both Anheuser-Busch's St. Louis corporate headquarters, at breweries and its distribution network.

The group closed its takeover of Anheuser-Busch last month, ending Anheuser's roughly 150 years of independence as a premier American brewer while creating the world's largest beer company.

The new company is expected to have net sales of about 36 billion dollars a year, offering consumers some 300 brands, including Anheuser's Budweiser and Bud Light, and InBev's Stella Artois and Beck's.

The job reductions come on top of more than 1,000 cuts already carried out through a voluntary retirement scheme that closed in mid November.

The bid for Anheuser-Busch had stirred fierce opposition in the company's home state of Missouri where Governor Matt Blunt has called the prospect of a foreign takeover "deeply troubling."

Employees who lose their jobs are to receive severance pay and pension benefits based on age and years of service as well as other benefits such as help finding other work.

The company said that it expected the cuts, most of which are to take place this year, to cost it about 197 million dollars and that they are part of 1.5 billion dollars in synergies expected to be created by the merger.

Anheuser-Busch InBev's memo about job cuts

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December 8, 2008
To: All Anheuser-Busch U.S. Employees

Over the past few weeks, the senior management of our organization has made very difficult decisions, and today we are announcing a workforce reduction of approximately 1,400 salaried people in our U.S. beer-related divisions, with about 75 percent coming from our St. Louis organization at headquarters, downtown offices and our Sunset Hills offices. The primary groups affected are engineering, information technology and other corporate positions.

Most reductions will occur before the end of the year, with the remainder taking effect next year. These reductions are in addition to the more than 1,000 people company-wide who will retire before the end of the year and in addition to the 250 positions that are open system-wide and that will remain unfilled. An additional 415 contractor positions will be eliminated. BEC and Anheuser-Busch Packaging Group employees are not affected by this announcement.

A press release announcing these reductions can be accessed on the A-B Web site here http://abweb.corp.anheuser-busch.com/ablil2/docs/ABInBevpressrelease8Dec2008a.pdf.

These decisions are a result of a careful review of each department. As expected, there are overlapping functions and synergies gained through the merger, which have driven part of these reductions. Others are the result of ongoing efficiency improvements and additional cost-reductions, including lower capital expenditures. These were not easy decisions, but were necessary for the organization.

The people affected will be offered severance benefits that we hope will help ease the transition as much as possible. In addition to severance pay and pension benefits, displaced employees will be offered one year of medical coverage, 2009 vacation pay and outplacement services.

We know this will be very difficult – many good workers who are trusted and valued in the organization will not remain. We respect and are grateful for their many contributions. They are, and always will be, a part of this company’s legacy of quality – we have long said, once a member of the Anheuser-Busch family, always a member.

In the coming days, your managers and people representatives will be meeting with employees to advise them of their status. We appreciate your utmost professionalism and esteem extended toward each of your colleagues during this period of transition. We also thank you for remaining focused on results and in managing through this uncertain and unfortunate time. The spirit of this company – which comes from its people – has never been more evident than it is now.

Anheuser-Busch soon to be owned by Inbev

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It is almost official, the nation's largest brewery will soon belong to a Belgium company.

Anheuser-Busch shareholders approved the sale of the company to Belgium based Inbev.

The 52-billion dollar deal is expected to close by the end of the year.

Once the deal is final, Inbev's North American operations will move to St. Louis, Missouri, where Anheuser-Busch was founded more than 150 years ago.

'A bittersweet day' for A-B

SECAUCUS, N.J. — After 156 years, it had come down to this.

In a ballroom at the Crowne Plaza hotel a few miles from Manhattan, August A. Busch IV stepped up to a lectern festooned with an Anheuser-Busch eagle. He looked out at a crowd of 150 shareholders.

"By my watch, it's 12 o'clock," said Busch. Decision time.

Noon Wednesday marked one of the last stepping stones on Anheuser-Busch's path to selling itself to Belgian brewer InBev. Shareholders had a choice: accept or reject one of the biggest corporate takeovers in history.


Anheuser-Busch, only a few years removed from being the world's biggest beer maker, had never hosted a shareholders meeting like this. InBev's $52 billion buyout would end Anheuser-Busch's reign as the biggest independent American brewer.

In 25 minutes, it was all over.

Anheuser-Busch announced what Wall Street had expected: Shareholders voted overwhelmingly to accept the buyout of $70 per share, in cash. Owners of more than two-thirds of Anheuser-Busch stock voted. Of shares voted, 96 percent — 497 million shares — were cast in favor of the deal.

In a nasty year for investors, InBev offered a heavy premium to Anheuser-Busch's historical value. It was too good to pass up, shareholders said. But a few voted "yes" with mixed emotions.

"It's very sad to come to this," said Marie Sigmund-Markheim, whose husband worked in Anheuser-Busch's New Jersey yeast plant before it was closed. She was not rejoicing, she insisted, even though she had already voted for the deal. "What can you do?"

The talk among shareholders reflected the conflicted views about the takeover. America is losing an icon, said one man. No, said another, everybody will be better off for the deal — you've got to keep pace with the times.
bullet Get more coverage of Anheuser-Busch's historic meeting at our new 'Lagerheads' beer blog
bullet Follow the history and timeline of the InBev purchase of Anheuser-Busch


UNCERTAIN TIMES

A thousand miles away, St. Louisans seemed resigned to the news.

"Not happy," said Don Moore, 55, a carpenter who was enjoying a Bud Light on Wednesday afternoon at DB's, a sports bar not far from the brewery. "I feel like they've been supporting the neighborhood, the city, and I don't know that'll happen anymore. I don't know what's going to happen."

Coming after Anheuser-Busch's board unanimously recommended InBev's offer, the vote was expected to be a formality. The deal still awaits regulatory approval in China, the U.K. and the U.S. InBev and Anheuser-Busch said they expected the deal to close by the end of the year.

Then, a new company will emerge: Anheuser-Busch InBev. It will be the world's biggest brewer, selling one of every four beers across the globe.

The combined entity "will have more than double the profitability of its largest competitor, SABMiller," said analyst Lauren Torres of HSBC. "The combination of these two companies should create one incredibly powerful global brewer."

Anheuser-Busch, one of the biggest employers in St. Louis and probably the city's best-known corporate citizen, didn't go down without a fight. For weeks this summer, it resisted InBev's initial offer of $65 a share, arguing that the offer underestimated its potential and the value of its brands. Veiled threats and lawsuits flew between St. Louis and Leuven, Belgium.

But when InBev came back to the table with an offer of $70 a share, in cash, Anheuser-Busch's board quickly lent their seal of approval.

That was four months ago. Since then, St. Louis has gradually come to grips with the oncoming reality: Anheuser-Busch, long a point of pride in the city, will become a subsidiary of a foreign company, its fate no longer controlled from One Busch Place.

Anheuser-Busch employees also feel the loss of control.

Rumors about imminent mass layoffs before the deal closes have swept through the brewer, spurring A-B to deny this in a recent communique to employees.

Still, employees worry about a future under an owner known for its intense cost-cutting, no-frills culture.

"People are nervous. They're nervous about change," said one A-B employee Wednesday afternoon.

Leaving work at the brewery, another employee said: "I'm concerned there will be a lot of people leaving soon."

Both A-B employees requested anonymity because they've been told not to speak to reporters.

Juli Niemann, analyst at Smith, Moore & Co., thinks layoffs are on the way at the brewery.

Things will look meaner going forward, she believes, with job cuts concentrated in support areas, such as marketing promotion, advertising and administration as InBev CEO Carlos Brito takes an ax to costs.

Those that took the early buyouts will get the best deal, Niemann says: "They'll be a conga line down Pestalozzi Street."

In June, Anheuser-Busch announced aggressive cost-cutting measures that included buying out up to 1,300 older, white-collar workers.

DIFFICULT DECISION

Some shareholders who voted for the deal Wednesday reminisced about Anheuser-Busch's legacy. Julie Woytowich, 90, worked for Anheuser-Busch at its Newark brewery for 34 years, starting in 1951 as a clerk and working her way up to a supervising position. She came to the meeting with her nephew.

"We were very fortunate to work for a company like Anheuser-Busch," she said before the meeting. "I loved going to work. It's not all money."

The all-business meeting was a far cry from Anheuser-Busch's typical show. Only a few months ago, Anheuser-Busch executives traveled down to its SeaWorld park in Orlando to host the company's annual meeting. It was an upbeat affair.

Chilled beer on ice stood ready under palm trees. A red beer wagon with a hitch of Clydesdales stood outside. Inside the conference center, Busch showed off one of the company's top-ranked Super Bowl commercials, chatted about Anheuser-Busch's NASCAR sponsorship, and invited the hundreds of retired shareholders to try some new Bud Light Lime.

"We're going to have a great year," he said at the April meeting.

It ended up being Anheuser-Busch's most eventful year ever, as it first rejected and then accepted InBev's overture.

On Wednesday, Busch defended the deal that would end his family's reign at the top of Anheuser-Busch after five generations.

Weighing the offer and eventually deciding to support the deal "was a very difficult decision for any board to make," he said during Wednesday's meeting. "It was discussed and debated extensively."

In the end, Busch said, Anheuser-Busch's board judged that a tie-up with InBev would be the best option for shareholders and would lead to a "promising future" for everyone involved — including employees, he said.

Sending greater quantities of Budweiser into more international markets — one of InBev's stated goals — fulfills "the global ambitions of my family," Busch said. "We are about to sell more beer, to more people, in more countries than any other company in the history of brewing beer."

During a brief comment period, one San Francisco shareholder stood up to make an impassioned plea to nix the deal. The buyout would mean jobs lost and put Anheuser-Busch's charity efforts in jeopardy, she said.

"It's not too late to vote for the common good," she urged the other shareholders.

Patrick Stokes, the company's chairman, politely thanked her. Then the votes were counted. Ninety-six percent in favor. Meeting adjourned. Lounge music came on over the loudspeakers.

"A bittersweet day," Busch said as he left the stage.

Gail Appleson, Greg Jonsson and Jim Gallagher of the Post-Dispatch contributed to this report.

A Look at Anheiser-Busch and Inbev

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ST. LOUIS (AP) -- Anheuser-Busch's shareholders approved the sale of the company to Belgium-based InBev on Wednesday. Here's a look at the $52 billion deal:

Anheuser-Busch InBev will be the world's largest brewery, producing an estimated 460 million hectoliters of beer annually.

InBev's strategy is to increase sales of Budweiser and Bud Light in overseas markets where the beers are currently niche products.

InBev CEO Carlos Brito, who will head the new company, has said Budweiser will become a global product along the lines of Coca-Cola or Pepsi.

While Anheuser-Busch spends hundreds of millions of dollars annually in marketing, the company has focused mostly on its U.S. customers.

Shareholders Approve Selling "Budweiser" To Belgian Firm

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St. Louis, MO (AHN) - Anheuser-Busch announced Wednesday it received majority vote from shareholders approving its merger with foreign rival InBev. The deal will create the world's largest beer company.

InBev is paying $52 billion for Anheuser. The deal works out to roughly $70 a share. Anheuser shareholders will receive a cash payment in that amount for each share they own.

Approval from Anheuser shareholders was the last major hurdle the deal faced. InBev shareholders had approved the deal back in September. The companies expect the deal to close by the end of the year.

Anheuser originally resisted the unsolicited offer from InBev, but ultimately realized with a weakening consumer environment, the deal was too good to pass up.

"Every alternative was considered," said President and CEO August A. Busch IV, according to the Associated Press. "In the end, we all agreed the InBev proposal was in the best interest of you, the shareholders."

August A. Busch is set to serve on the board of directors for the combined company. However, he will no longer hold an executive role.

The deal gives Anheuser's Budweiser brand the opportunity to become a global market leader, a feat the company had not been able to accomplish on its own.

Although the deal received majority approval, many shareholders at the meeting were distraught such a great American company would become controlled by a foreign corporation.

St. Louisans sad over Anheuser-Busch sale

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ST. LOUIS -- St. Louisans say they feel the city has lost part of its identity with the sale of Anheuser-Busch Cos. Inc. to Belgium-based InBev SA.

Becky O'Brien of suburban St. Louis was at Tucker's Place restaurant just down the street from the brewery, hours after the sale was finalized Wednesday.

She said people identify Anheuser-Busch, the Gateway Arch and Busch Stadium with St. Louis.

She said having Anheuser-Busch under foreign ownership felt like a loss for one of the city's icons. The brewery will keep its North American headquarters in the city.

A St. Louis resident, Jim Chamberlain, says he hopes InBev's ownership will increase Anheuser-Busch's global presence.

Anheuser-Busch Shareholders Approve InBev Takeover

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Nov. 12 (Bloomberg) -- Anheuser-Busch Cos. shareholders approved InBev NV's $52 billion takeover offer, agreeing to create the world's largest brewer and hand over its controlling share of the U.S. beer market to the Belgian company.

Investors, who met today in Secaucus, New Jersey, voted 96 percent of the shares cast in favor of selling the St. Louis- based brewer for $70 each. Holders of Leuven, Belgium-based InBev agreed to the purchase on Sept. 29. The combination will put InBev's Beck's lager and Leffe Belgian ales together with Anheuser-Busch's Bud Light, Budweiser and Michelob brands.

``This is the right thing for the company and the shareholders,'' Bill Schlosky of New Jersey, who holds Anheuser-Busch shares and attended the meeting, said today. ``This is how capitalism should work.''

Today's vote clears another hurdle for the brewers to complete the deal by the end of the year even as tightening credit markets threaten InBev's $45 billion in loans to purchase the 156-year-old beer company. Antitrust regulators in the U.S., U.K. and China still must approve the deal, InBev Chief Executive Officer Carlos Brito said Nov. 6.

The merger ensures ``a promising future'' and fulfills the ``global ambitions of the family,'' Anheuser-Busch Chief Executive Officer August A. Busch IV said during the meeting. The Busch family has controlled the company for five generations

Busch said earlier this year that the company wouldn't be sold ``under my watch'' after speculation InBev might try to buy the U.S. brewer. Anheuser-Busch spurned InBev's original $46.3 billion proposal on June 26 as ``financially inadequate,'' while keeping the door open for a higher offer from InBev or another suitor. The companies signed an agreement July 14.

Biggest Brewer

Investors have increasingly bet the purchase will take place after pushing Anheuser-Busch shares down to close at $56.93 on Oct. 24, 19 percent less than the offer price.

Anheuser-Busch fell 51 cents to $66.33 at 4:15 p.m. in New York Stock Exchange composite trading. InBev fell 1.66 euros, or 5.3 percent, to 29.41 euros in Brussels trading.

InBev, already the world's largest brewer by sales, will become the biggest by amount of beer sold as well. The combined company, to be called Anheuser-Busch InBev, will exceed $36 billion in annual revenue, 85 percent more than InBev's 2007 sales. Anheuser-Busch controls about 50 percent of the U.S. beer market, according to data from Euromonitor International.

InBev NV has commitments from 19 lenders to provide financing for its purchase. The brewer postponed a $9.8 billion stock sale aimed at paying off merger debt, it said Oct. 14. The company will wait for markets to stabilize, it said.

The U.S. Department of Justice's antitrust review of the acquisition may be completed by the end of the month, Anheuser- Busch Chief Financial Officer Randy Baker said Nov. 6.

After the meeting, Busch declined to say whether the merger might close this month and reiterated that it may be completed by the end of the year.

To contact the reporter on this story: Duane D. Stanford in Atlanta dstanford2@bloomberg.net.

Anheuser Holders Approve InBev's $52 Billion Takeover

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Anheuser-Busch Cos. shareholders backed the brewer's $52 billion takeover by InBev SA, paving the way for the iconic U.S. company to be placed into the hands of the Belgian-Brazilian giant by the end of the year.

The deal now awaits approval from antitrust authorities in the U.S., U.K. and China.The transaction, approved by InBev shareholders in September, would create the world's largest beer maker, with about 300 brands -- including Anheuser's Budweiser and InBev's Beck's -- and annual net sales of about $36 billion. The new company, to be called Anheuser-Busch InBev, would be followed in size by London-based SABMiller PLC.

Anheuser and its predecessor companies have been led by members of the Anheuser or Busch families for most of the operation's 156-year history.

Supporting the proposed combination "was a difficult decision for our board to make," said Chief Executive August A. Busch IV, who will be a director of the merged company. "In the end, the board determined that the InBev proposal is in the best interest of our shareholders."