InBev shareholders OK Busch deal

InBev shareholders OK Busch deal

InBev shareholders OK Busch deal

The $52 billion takeover by Anheuser-Busch would create the world's largest brewer.

InBev SA shareholders on Monday backed the company's $52 billion, or €32.8 billion, takeover of Anheuser-Busch Cos. - a deal that would form the world's largest brewer.

They also approved changing the company's name to Anheuser-Busch InBev and a capital increase and share issue that would raise up to $10 billion, or €6.9 billion, to pay for part of the deal.

Cutbacks in U.S.

InBev chief executive Carlos Brito also tried to soothe U.S. worries over possible job losses at Anheuser-Busch, saying he was sticking to his commitment not to close or make new cutbacks to its 12 "very efficient" breweries.

But he added some conditions to this promise: "provided there are no new or increased federal tax or state excise taxes or unforeseen extraordinary events that would negatively impact A-B's business."

The International Brotherhood of Teamsters, a trade union representing some 8,000 Anheuser-Busch truck drivers and other workers, warned that it would hold the company to its promises.

"Unexpected events can happen. The workers of Anheuser-Busch in the United States intend to keep the company to its word at keeping those plants open," said Timothy Beaty, the teamsters' director of global strategies.

InBev Chief Executive Carlos Brito said in a statement that the shareholders' vote of support showed they saw the strategic and financial benefits of combining with Anheuser-Busch.

"We are very pleased to complete this important milestone and we remain on track to close the transaction by the end of the year," he said in a statement. The deal still needs to be cleared by regulators and by Anheuser-Busch shareholders.

Capital increase approved

The company will also have to announce the detail of the share issue, now that it has secured shareholders' agreement for a capital increase to cover an existing equity bridge financing of $9.8 billion in place since the deal was announced in July. It also asked for an extra margin to cover any major currency fluctuations until the share issue is finalized.

More than three-quarters of InBev's shareholders voted in favor of the deal, the name change and the capital increase at a meeting at the company's Leuven, Belgium, headquarters.

They also backed the appointment of Anheuser-Busch (BUD, Fortune 500) chief executive August Busch IV as a director in the new company and changing control of Anheuser-Busch's existing $45 billion senior credit facility and the equity bridge financing of $9.8 billion.

InBev had already said its controlling shareholder - Stichting InBev, which owns a 52% stake - backed these changes with the support of at least another 11%.

Stichting InBev is controlled by three Brazilian financiers - including the investment banker and billionaire Jorge Paulo Lemann - and a group of Belgian aristocratic families.

The takeover would bring together the makers of Budweiser, Michelob, Bud Light, Stella Artois and Beck's and create the world's largest brewer, as well as the third-largest consumer product company.

InBev is currently the world's second-largest beer-maker, narrowly behind SABMiller. Swallowing Anheuser-Busch would see it capturing half of the U.S. beer market and a fifth of China and Russia's.

Foothold in emerging markets

The Belgian-Brazilian brewer said its foothold in emerging markets such as China and Brazil would boost sales of Anheuser-Busch's brands.

Anheuser-Busch agreed on July 14 to be taken over by InBev, heading off what had promised to be a long and acrimonious takeover battle for the St. Louis-based brewer. Ahead of the takeover, the company had already planned to save money by shedding 1,185 positions - mostly by offering early retirement and not filling existing vacancies.