Filed under: Deals, Management, Industry, Competitive strategy, Anheuser-Busch Cos (BUD)
To keep itself from the hands of beverage giant InBev, Anheuser-Busch (NYSE: BUD) might do some shopping of its own. According to The Sunday Times, , the U.S. company may buy 50% of huge Mexican brewer Grupo Modelo. “Snapping up the 50% of Modelo that Anheuser does not already own would cost the company between $10 billion and $15 billion and could make Anheuser too high-priced for InBev to afford, analysts say.”
The investment in the Mexican company might well come through borrowing. The leverage would, indeed, make BUD a less attractive takeover target.
The arrangement might serve the needs of management and its desire to keep the company independent. But, it probably injured current shareholders in BUD. The rumors about InBex pushed Anheuser-Busch to a 52-week high at $58. Without a takeover, the stock is not likely to stay there.
The matter is another fine example of executives keeping their jobs at the expense of shareholders.
Douglas A. McIntyre is an editor at 247wallst.com.
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