By Ingrid Melander and Julien Ponthus, Thu Jun 12, 2008 11:53am BST
BRUSSELS (Reuters) - InBev began courting Anheuser-Busch shareholders and staff on Thursday after making a $46.3 billion (23.7 billion pounds) bid, hoping to add Budweiser to its own Stella Artois and Beck's beers and create the world's largest brewer.
"We respect the Anheuser-Busch board a lot ... we admire them a lot and we think that the business rationale is very strong," InBev Chief Executive Carlos Brito said in a video statement on InBev's website (http://www.globalbeerleader.com/home_ceo.php).
Brito said the new company would retain top managers and board members from both sides, suggesting InBev was looking for a friendly merger of equals rather than a hostile takeover.
"The combined company would be run by the combined entities," he said, without divulging whether he would seek to head the new beer behemoth himself.
InBev stock was up 2.9 percent at 48.66 euros by 1047 GMT (11:47 a.m.) Thursday, while shares in Anheuser, which counts Warren Buffett's Berkshire Hathaway as its second largest shareholder with a 5 percent stake, jumped more than 7 percent to $62.73 on Wednesday.
"Acquirers aren't punished for pursuing sensible acquisitions, despite that being surprising given the market conditions," a London-based equity trader said.
InBev is offering $65 per share for Anheuser, which dominates the U.S. beer market with a 48.5 percent share.
A number of analysts believe InBev will need to raise its offer to around $70 per share to succeed but most welcomed the business logic behind combining both groups.
"The deal obviously makes sense for InBev. Apart from the perfect geographical fit ... the new combination would (also) have one of the best brand portfolios in the world," Degroof analyst Marc Leemans said in a research note.
ST LOUIS HERITAGE
Anheuser, the maker of Bud Light and Michelob beers, has so far not declared the unsolicited bid to be hostile. It said after the offer was announced on Wednesday that its board of directors would consider its response in due course.
In an effort to reassure managers and staff, but also customers, Brito said he expected no cultural clash between the two companies and that the identity of the St Louis-based brewer would be preserved.
"The whole heritage around the brand, St Louis ties, we intend to keep because that is important for the business and for the community and therefore for us," Brito added.
For most of the last century and a half, since Adolphus Busch, a German immigrant, married Lilly Anheuser and went to work at her father's brewery, the U.S. brewer has been led by members of the Busch family.
They are likely to oppose a takeover, analysts have said, but one family member, an uncle of the current chief executive, has said he is open to it.
SABMiller, the world's largest brewer, said a link-up between InBev and Anheuser-Busch would not dramatically change the global brewing competitive market, confirming analysts' assumptions that the deal is unlikely to face legal hurdles from competition authorities.
"We do not think this changes the competitive landscape dramatically given Anheuser-Busch's small presence outside the United States," an SABMiller spokesman told Reuters.
The global beer industry is undergoing a wave of consolidation, with Scottish & Newcastle agreeing to be broken up by Carlsberg and Heineken, and SABMiller and Molson Coors Brewing agreeing to merge their U.S. operations.
If the deal goes through it will be the largest takeover deal this year, and the third largest foreign takeover of a U.S. company ever. The scale of the deal was such that dealers said news of it supported the dollar on foreign exchange markets.
InBev is being advised by Lazard and J.P. Morgan, while sources familiar with the situation have said Anheuser has hired Goldman Sachs and Citigroup.
InBev said the deal will be financed with at least $40 billion in debt and a combination of non-core asset sales and equity finance. The finance will be provided by a group of banks including Banco Santander SA, Barclays Capital, BNP Paribas SA, Deutsche Bank AG, Fortis, J.P. Morgan and Royal Bank of Scotland Group.
(Additional reporting by David Jones; Editing by Quentin BryarShare Investor Business News- Get more business news
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