InBev was formed in 2004 from the merger of AmBev and Interbrew that made it one of the world leading brewers. The chief reasons for the merger were to offer Interbrew a competitive advantage in the fast growing brew market in Latin America.
Similarly, the merger was also aimed at providing AmBev with a better opportunity to expand its market to Europe and North America regions and particularly a market for its Brahma brand. The merger resulted to a newly formed InBev Company that have more than 200 brands that are grouped into three categorizes, namely; global brands that include Becks and Stella. The former brand is distributed in 100 countries, while the later brand is distributed to 80 countries.
The other category is referred as the multicounty brands and includes brands such as Brarna which is sold to 30 countries, Leffe that is distributed to 60 countries, Staropramen that is sold in 30 countries and lastly Hoegaarden that is also distributed to 30 countries.
InBev is a well established company that is ranked as the second largest brew company globally after BASEMiller. On the other hand, Anhauser Busch traces originated 152 years back when Eberhard Anheuser bought St. Louis brewery that was underperforming.
The company has continuously enhanced its performance and it is nowadays raked as the fourth brewer worldwide with about 92% of its sales within the united sates of America. The company enjoys approximately 50% of the US brew market. The company is well established in the United States of America brew market and highly admired by many because of its good corporate culture.
The acquisitions of the Anhauser Busch Company by the InBev Company will be a perfect match that will be very beneficial to the two entities. The Anhauser Busch has many popular brands that are highly marketable within the United States of America as they are regarded as brews of very high quality.
The high quality of its products is among the reasons that have enabled the company to perform very well in the United States of America. The InBev proposition to buy the Anhauser Busch shares at a rate of $ 65 per share was not a fair deal. The InBev Company was not compensating the Anhauser Busch stakeholders adequately, but was using that opportunity to take the advantage of the weakening US dollar and poor performing US stock market.
The management at Anhauser Busch took a very informed decision to engage a third party who advised them accordingly to reject the initial offer given to them by the InBev. At a rate of $ 65 per share, the company could not sell their shares to InBev Company since they could raise similar benefits as reflected by their strategic plan.
The turning down of that offer resulted to InBev raising the share price they were offering from $ 65 to $ 70 which was a fair deal for Anhauser Busch shares. That was the reason that motivated the board of directors at Anhauser Busch to accept the offer since by selling their shares at $70 the management at Anhauser Busch perceived it as a profitable deal for their stakeholders as a means of maximizing their profits and particularly during this moment when the US dollar was weak and the US stock market underperforming.
The acquisition of the Anhauser Busch Company by the InBev Company will be a very strategic move for both companies to enhance their performances and eventually maximize profits for their stakeholders. The existence of the InBev Company management will greatly assist to extend the global market of the Anhauser Busch Company products.
The Anhauser Busch company global market performance is very poor since it only accounts for 8% of its overall sales. This low global performance is a clear indication that the company is facing a big challenge in penetrating global market which is very detrimental at this juncture where Anhauser Busch Company needs to enhance their global sales due to the weak US dollar.
The InBev company well experienced workforce will step in and assist the company to argument its global sales in order to enhance profit realized. The acquiring of the Anhauser Busch Company by the InBev Company will ensure that the InBev Company becomes the leading brewer worldwide with an annual net sale of $ 36 billion.
The management at InBev has assured the management at Anhauser Busch Company that they will retain almost every employee in their company once they acquire it. The management at Anhauser Busch Company will assist the InBev management on how to extend their market in the United States of America from the current 50% the Anhauser Busch Company is commanding.
Similarly, the management at Anhauser Busch Company will bring into InBev their strategic corporate culture that will help InBev Company increase its market within United States of America and across other continents.
Another opportune alternative that can greatly favor Anhauser Busch Company is if the management insists on a merger of the two companies rather than an acquisition. The merger will help the Anhauser Busch Company extend its global market, but it may not be very profitable for the InBev Company as an acquisition and most probably they will not settle for it.