When InBev completed its $52 billion acquisition of Anheuser-Busch on Nov. 18, 2008, Anheuser-Busch InBev, the world’s largest beer company, was born. The deal means A-B is now a wholly owned subsidiary of A-B InBev, retaining its St. Louis headquarters.
“Consolidation was one of the inevitable facts in the beer business,” said Bill Bishop, chairman of Willard Bishop, Barrington, Ill.
The old A-B was extraordinary in terms of its marketing capabilities, said Bishop. But it was limited it terms of growth because it didn’t have international scale.
That’s changed with InBev’s backing. The combined business spans more than 30 countries, manages a portfolio of nearly 300 brands, and has four of the top 10 selling beers in the world, and the No. 1 or No. 2 position in over 20 markets.
In March, the company gathered 150 senior leaders in St. Louis to see firsthand how A-B operated. It also introduced A-B’s leadership team to its global counterparts, and exchanged best practices at the gathering. The company has made good progress in integrating A-B, achieving $295 million in synergies in the first quarter of 2009, said Carlos Brito, chief executive officer of A-B InBev, in a statement.
“We are moving quickly to capture our synergy goals,” Brito said. When it first announced the transaction, InBev estimated it would yield cost synergies of at least $1.5 billion annually by 2011.
While the manufacturer has nearly 300 brands, most of its resources are being directed against so-called “focus” brands: Budweiser, Stella Artois, Beck’s and others. Representing 65% of its beer volume, focus brands experienced 3.5% growth in the first quarter.
The deal has not come without its pain points. A month after the company completed the acquisition, it announced that 6% of the workforce would be cut. About three-quarters of those were in St. Louis.
— Carol Angrisani