BRUSSELS, Belgium - The maker of the King of Beers has agreed to go to work for the Belgian brewer InBev SA.
Anheuser Busch Cos. said early Monday it had agreed to a sweetened $52 billion takeover bid from InBev, creating the world's largest brewer and heading off what was shaping up as an acrimonious fight for the maker of Budweiser and Bud Light beers.
The deal, which would also create the third-largest consumer product company, will be called Anheuser-Busch InBev.
The Anheuser-Busch board accepted the higher takeover offer Sunday night from Belgian-based brewer InBev SA, according to a joint press release.
"I think we're going to bring the best of both companies into one company, our footprint with their amazing brands," InBev CEO Carlos Brito said in a video posted on InBev's Web site.
For InBev, the maker of Stella Artois and Beck's, the deal gives an aggressive company an iconic beer brand — Budweiser — to sell into emerging markets such as China and Brazil where it has already established a firm footprint.
InBev is currently the world's second-largest beer-maker, just behind SABMiller. Swallowing Anheuser-Busch sees it leap ahead, capturing half of the U.S. beer market and a fifth of China and Russia.
Brito will be chief executive officer of the combined company. Shareholders will receive $70 a share, a $5 increase over the offer Anheuser-Busch rejected in June.
Anheuser-Busch shares rose 79 cents to $67.29 in morning trading.
It wasn't immediately clear how long approval might take. Several Missouri politicians have expressed concerns about the merger — especially how it would affect the approximate 6,000 people employed by Anheuser-Busch in St. Louis.
It also drew the attention of Mexico's Grupo Modelo. Anheuser-Busch also owns a 50 percent share in Grupo Modelo, which said in a statement Monday that its relationship with Anheuser-Busch gives it consent rights to the deal.
"Our agreement with Anheuser-Busch was carefully constructed to ensure we have a definitive say in who our partner is. We are confident that our agreement, which is governed by Mexican law, gives us the right to decide whether or not to consent to the potential acquisition of Anheuser-Busch by InBev," Grupo Modelo said in a statement.
InBev said it plans to use St. Louis as its North American headquarters, and that it will keep open all 12 of Anheuser-Busch's North American breweries.
It has not said whether it will cut more jobs on top of the 1,185 positions Anheuser-Busch already said it wants to shed — mostly by offering early retirement.
It will, however, sell off "noncore assets" from both companies to raise some $7 billion to finance the deal. It will also borrow $45 billion and may sell shares to raise another $9.8 billion.
Shareholders won't see much joy in the short-term. InBev warned of lower dividends and no benefit to earnings per share until 2010.
But it is promising longer-term rewards in a stalling market. Beer sales in North America and Europe are flat as drinkers turn to wine and spirits. InBev has compensated by finding new drinkers in Latin America, eastern Europe and Asia that will now be handed a cold Bud.
InBev cost synergies of at least $1.5 billion a year by 2011 over three years. Most of that will come from managing the supply chain better. InBev's sharp eye on costs — which forces managers to justify every cent spent — will also play a major part.
Monday's kiss-and-make-up announcement from both companies came after several weeks of guns blazing. InBev said on June 11 it wanted to buy Anheuser-Busch, which distributes its beers in the U.S.
Anheuser-Busch shrugged off the first offer as two low, prompting InBev to seek the removal of all Anheuser's board members. Anheuser counterattacked, calling InBev's bid an "illegal scheme" because the company failed to mention that it owned a brewery in Cuba.
Few products are associated with America as much as Budweiser, which its owner calls the King of Beers. Its Clydesdale horses are fixtures of Super Bowl ads, and even the label is red, white and blue, with an eagle swooping through the "A."
To some in St. Louis, losing Anheuser-Busch to a foreign buyer meant losing a little bit of history. From college buildings to theme parks to offices to the stadium where the Cardinals play baseball, the Busch name is virtually everywhere in the Gateway City.
Despite more than 600 years of brewing beer in Belgium, InBev is more rootless. Although based in Leuven, Belgium, it is run by a Brazilian management team and sells most of its beer outside Europe.
It owns a massive portfolio of local brands from Siberia to Argentina that rarely travel. InBev has only recently started to push its two best-known brands — Stella Artois and Beck's — more widely.
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AP Business Writer Christopher Leonard wrote from St. Louis, and Associated Press writer Jim Salter in St. Louis contributed to this report.
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