Belgian brewer InBev NV made a $43.6 billion unsolicited offer to buy Anheuser- Busch Companies (NYSE:BUD) just after the close of trading today, and investors are loving their BUD shares after the close. The stock, which was higher by 2.1% during the regular session before the news broke, has gained another 10% in after hours trading.
Anheuser-Busch responded by saying that it intends to evaluate the bid, which accounts to $65 per share, "in due course." In fact, CEO August Busch IV sent an email to BUD distributors telling them that business as usual should continue and that a decision may take many months.
Don't count your chickens before they hatch though, as this one has plenty of hurdles to clear. The beer industry is highly regulated to begin with, and many believe that Anheuser-Busch may well wish to decline this offer. The story likely will take some time to play out as well, as BUD seems in no hurry to react, and regulators will certainly want a very close look at this before allowing the biggest brewer acquisition ever.
InBev is no doubt interested in Anheuser-Busch largely because of SABMiller's recent combination of U.S. operations with Molson Coors (NYSE:TAP). InBev has huge revenues overseas, but brings in less than 1% of their beer sales from the United States. BUD shares have been quite stagnant over the last few years as the company has struggled to find ways to grow its bottom line appreciably.
Will the deal happen? It's very hard to tell at this point, and I think its likely we won't know for quite some time. There will most certainly be some strong opposition to the deal as many see Anheuser-Busch as an iconic American company, but some shareholders will also surely be pushing the deal because they believe it will create value. Stay tuned on this one, there is plenty more news to come on this proposed deal!
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