David Prosser's Outlook: Getting drunk on merger gossip
Thursday 29 May 2008
Don't pay too much attention to the reports yesterday that SABMiller and InBev have held preliminary discussions about a merger in the event of the Belgian group's ambitions of buying up Anheuser Busch coming to nothing. InBev might like the idea of spooking Anheuser with talk of a deal to leave the Budweiser owner out in the cold, but I'm told there have been no substantive conversations with SAB.
The theory is that Anheuser, which has so far proved immune to the charms of InBev, might feel compelled to open discussions were there to be a serious prospect of InBev and SAB teaming up, particularly if SAB were then to consider off-loading Miller to its joint venture partner Molson. That just might prove to be a threat to Budweiser and Bud Light, Anheuser's number one and two top-selling US beers.
All well and good, but SAB says it is too busy completing the implementation of its alliance with Molson to even consider other deals. There's also the small problem of InBev's existing distribution agreements with Anheuser, which would likely have to be ripped up, at some cost, were the Belgian company to team up with another suitor.
For the moment then, the Busch family members of Anheuser's board, who are said to oppose a takeover bid from InBev, will not feel under any additional pressure to come to the table for talks (though more independent members of the company's executive team are in a position to steer the company towards holding discussions).
Still, as we move to what will prove to be a final round of consolidation in the global drinks industry, expect plenty more scheming of this kind (there have already been whispers, for example, that Diageo could be a rival bidder for Anheuser). This is what investment bankers, deprived by the credit crunch of any other meaningful M&A action, do when they chat over the cold beers sold by the clients they are so keen to get together.
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