The Financial Times (via MSNBC) has a complete analysis of why the rumored merger between brewing giants InBev and Anheuser-Busch makes sense, and why it might not happen.
They said the biggest obstacle to a deal would be reluctance on the part of the Busch family to relinquish management control of Anheuser.
The family has only a small shareholding in the company but August Busch IV, great-great grandson of the founder, was appointed chief executive last December. His father, August Busch III, remains a powerful influence on the board.
The company has been struggling over recent years as its domestic brands face increasing competition from wine, spirits and imported beer.
Analysts believe the board will give Mr Busch IV time to prove he can turn the company around on its own before considering other options.
But if growth remains sluggish, pressure is likely to build from shareholders for a merger with InBev to be considered.
The story points out that it’s the Brazilian dealmakers behind AmBev who control management of InBev (Interbrew before it merged with Ambev). The bottom line is they are businessmen, not brewers.
The bottom line really is the biggest part of this story. I heard other “analysts” on news radio business features also hailing these mergers as great business plans – but not great beer production plans. Maybe in the long run it will be the downfall of the “brewing conglomos.”