Filed under: Deals, Anheuser-Busch Cos (BUD)
For hungry Wall Street investment bankers, the $45 billion merger of InBev and Anheuser-Busch Cos. (NASDAQ: BUD) is a nice relief. Yes, it means lots of juicy fees.
Another massive winner is Busch IV (the CEO of Anheuser). Apparently, he’s negotiating a consulting agreement that may exceed $10 million (there will be a $120,000 monthly retainer through December 31, 2013).
But according to a piece in Reuters, the transaction may have a dark side. Simply put, it hasn’t been easy to raise the debt financing. As a result, this might crowd out some of the financing of other M&A deals.
The high rates on the InBev financing is apt to push up other debt costs on other pending transactions. What’s more, there will be a flood of bond issuances on the market, which will put further pressure on the debt markets.
In other words, we might see a slowdown in M&A activity for the rest of the year — except for those buyers that have substantial balance sheets.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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