U.S. brewer Anheuser-Busch Cos Inc accepted a sweetened $50 billion (25.2 billion pound) takeover bid from Belgium-based InBev NV, creating the world's largest beer maker.
InBev, which makes Stella Artois and Beck's, agreed to pay $70 per share for the maker of Budweiser, up from its original unsolicited bid of $65 per share, both companies said on Monday. The sweetened offer marked a 27 percent premium to Anheuser's record-high stock price in October 2002.
This deal, which is widely expected to gain regulatory approval, would be the largest in the industry and the third-largest ever foreign takeover of a U.S. company.
The combined company will have about $36.4 billion in annual net sales and brew about a quarter of the world's beer.
The beer industry is undergoing a wave of consolidation, with Scottish & Newcastle agreeing to be broken up by Carlsberg A/S and Heineken NV, and SABMiller and Molson Coors Brewing Co agreeing to merge their U.S. operations.
Based on Anheuser's 713 million shares outstanding as of March 31, the deal values the company at $50 billion. The companies pegged the price tag of the deal at $52 billion, but did not elaborate on what that value reflected.
InBev's Chief Executive Carlos Brito will be CEO of the combined company, which will be called Anheuser-Busch InBev. Anheuser will get two seats on the new company's board.
Anheuser's home town of St. Louis, Missouri, will be the headquarters for the North American region and the global home of the flagship Budweiser brand. The companies said all of Anheuser U.S. breweries would remain open.
The deal brings an amicable resolution to a month-long saga that was becoming increasingly hostile as the companies traded lawsuits and InBev set the stage to replace Anheuser's board.
InBev had proposed its own slate of nominees for the board of directors that included Adolphus Busch IV, an uncle of Anheuser-Busch's current chief executive.
Shares of InBev and Anheuser surged on Friday as news of the higher offer and the negotiations emerged. Anheuser closed up 8.6 percent at $66.50 and InBev closed up more than 7 percent.
Sources said the two companies and their advisers had talked in New York over the weekend, working through details such as the name for the combined company, roles for Anheuser's executives and the structure of the board. The breakup fees if the deal collapses also were discussed over the weekend, the sources said.
FRIENDLY DEAL
A deal at $70 per share is an about-face for both sides, said Morningstar analyst Ann Gilpin, noting that Anheuser Chief Executive August Busch IV had said he wouldn't sell the company and InBev CEO Carlos Brito said he wouldn't go higher.
