InBev secures financing

Wednesday, June 25, 2008

BRUSSELS, Belgium (AP) -- Brewer InBev SA said Wednesday it has secured financing for its bid to buy Anheuser-Busch Cos. Inc. for $46 billion.

The Belgium-based maker of Stella Artois said it wrote to Anheuser again Wednesday to assure the company's board that it has struck deals with a group of banks and has already paid over commitment fees to finance the takeover over.

Anheuser has not yet formally responded to InBev's offer of $65 a share since it was announced on June 11.

InBev says it has paid $50 million in commitment fees to a lending group that gathers Banco Santander, Bank of Tokyo-Mitsubishi, Barclays Capital, BNP Paribas, Deutsche Bank, Fortis, ING Bank, JP Morgan, Mizuho Corporate Bank and Royal Bank of Scotland.

The company's Chief Executive Officer Carlos Brito made another plea for the support of Anheuser's board for an agreed takeover but stressed time was running out.

"This firm proposal is subject only to the negotiation of mutually satisfactory definitive agreements," he said. "We are committed to entering into a constructive dialogue with you to achieve a friendly combination."

But Brito warned that "time is of the essence" and he was looking for an answer soon.

InBev made no move to raise the offer, insisting that market reaction to its bid "has been extremely positive" and the offer would give shareholders an immediate cash premium of 35 percent above the 30-day average share price prior to recent market speculation.

The $65 offer for each share is also 18 percent above Anheuser's previous all-time share price high in October 2002, it said.

Several politicians have come out against the deal, saying it may create a near-monopoly in the U.S. beer market and damage the economy at Anheuser's home state of Missouri by shedding some of the 6,000 workers the company employs in St. Louis.

Brito repeated in the letter that InBev would not shut any U.S. breweries and would help Anheuser's Budweiser beer expand sales across the world. St. Louis would remain the company's North American headquarters and "global home of the flagship Budweiser brand," he said.

Anheuser management would be retained at all senior levels and Anheuser board members would be invited to join the board of the new combined company.

Together the two businesses would form "one of the world's five largest consumer-goods companies," he said.

The beer industry has been consolidating in recent years amid costs for transport fuel and key ingredients and stale demand in wealthy markets in Europe and the United States. InBev has partly bucked that trend by relying on expansion in Latin America, eastern Europe and Asia.

InBev itself is a product of a major takeover when Brazil's AmBev took over Belgium's Interbrew in 2004. Both Brito and the company's chief financial officer came from AmBev, bringing with them a tight control on finances that has upped InBev's profits.


On the Net:

Anheuser-Busch Cos. Inc.: http://www.anheuser-busch.com

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