Surely, This Bud Must Be For Somebody
Anheuser-Busch CEO August Busch IV has been insisting for months that his company is not up for sale. This Bud is not for you, he warned acquirers. The market’s reaction: clapping its hands over its ears and yelling, “I can’t hear you, I can’t hear you.”
Budweiser options have been trading at healthy and steadily rising volumes, MarketBeat chieftain David Gaffen pointed out to us this morning: “Demand for [Anheuser-Busch] call options has surged,’” noted analysts at Credit Suisse. The heaviest activity is in the June call options (an option to buy a stock at a later date at a given price) at the $55 strike price.
That indicates that some investors are betting that Anheuser-Busch is a prime candidate for a takeover, and probably in the next two months.
Some deal matchmakers think the AmBev-Interbrew combination of InBev and Anheuser-Busch would get along great. David Silver of Wall Street Strategies wrote today, “We continue to see little growth opportunity for AB barring a combination with AmBev.”
The tale of the tape shows that Anheuser-Busch’s key stats are as unappealingly lukewarm as a lager left out in the sun. Sales inched up only 6% to $16.68 billion in 2007. Net income, similarly, dripped up 7% to $1.96 billion last year. Wholesaler inventories of Anheuser-Busch products are not moving.
One out of every two light beers sold in the U.S. is a Bud Light. That happy incumbency may not last for long. Anheuser-Busch’s international revenues rose 20% last year, but its domestic inventories barely budged. And SAB Miller and Coors plan to combine their U.S. operations to create a formidable competitor to Anheuser-Busch.
Meanwhile, Anheuser-Busch has little exposure to the faster growing segments of the beverage industry. It has struggled to build presence in the faster growing “craft” beer market, leading Credit Suisse to conclude the company should just accept its fate as a purveyor of mainstream brews.
That is, if the company can also accept its fate in being disbelieved by the markets when it insists it won’t sell.
Deal Journal bonus: Readers, has Anheuser-Busch lost its touch with potent potables, or do you still like their brands? This is what the company makes: Budweiser, Bud Light, Budweiser Select, Michelob, Busch, Natural Light, King Cobra, Hurricane Malt Liquor, and Rolling Rock. The company also imports and distributes several foreign brands, including Kirin, Tsingtao, Grolsch, Stella Artois, Beck’s and Bass.
Grolsch
Years ago I lived in Northern Illinois, and AB put out, into a limited local market, Michelob Golden Draft, to compete with Millers’ Genuine Draft.
It was the best affordable, domestic beer in the marketplace.
(and Michelob Golden Draft Light was actually drinkable, unlike Miller Lite, or Bud Light)
Too bad AB didn’t expand with it. (It’s the only thing I miss about living in Ill.)
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As for “best”, domestic or import, Stella is the best combination of full flavor, yet “smoothness” (not bitter) out there.
For a company that sells more than 100 brands, your limited list does not do it justice. Some of the best of what they brew is in their craft lines - Shock Top Belgian white, Sun Dog Amber Wheat, Michelob Pale Ale, etc. - those are all award-winning “craft” beers. And I must agree with Bob - Mich. Golden is outstanding.
Nothing cools me down on a hot winter day like an ice-cold King Cobra.
Bud Fat, aka not-Light, is the best all-around U.S. beer at that price.
Then Mich Light.
Coors = Worst Ever. Does anyone really think that being cold is what matters?
i must agree with peezy.. regular budweiser is the best tasting beer there is. Hands down. the sad thing about america is the fact that buying an “import” seems to be trendy otherwise budweiser would still dominate because it is the best tasting.
These beers are all undrinkable.
The best out of this weak bunch is Stella Artois.
To dan’s comment
They do dominate,
Budweiser was ranked as Beverage industry’s number one in a pole of top 5 companies in April ‘08 forbes magazine (or was it fortune) i will have to check my sources again, but the fact still remains. They were ranked number 1. They’ve had increases to their sales in the past three-years, however small. I feel that Busch IV is doing the right thing, ‘this bud isn’t for sale’. The company really needs to reinvent some of their ventures. Molson Coors forming alliance with MAB miller company????? that should be a HUGE sign to AB..”TIME TO MORPH in to VOLTRON!”.. lol
HOW IS AB DOING IN CHICAGO WITH JESSE JACKSON SON NOT EVEN SELLING BEER IN HIS OWN TERRITORY. GREAT JOB OF POLITICS FROM RON BURKLE FRIEND OF JESSIE.HOW MANY OTHER MINORITIES OWN 51%AB DISTRIBUTORS.ANSWER? ALL AB HAD TO DO WAS TAKE CARE OF THE JESSIE SR. NO MORE PROBLEMS
For Teds comment
None of Buds “craft line” have won any awards. They are designed knock offs of leaders in other categorys in order to dilute sales. They are called “category killers”. Shock top is a clone of Blue Moon, Michelob line is trying to morph itself into Sam Adams….etc. Bud actually tries to defend there core brands Bud/Bud light by doing so and hurting th retailer. That’s why their sales continue to decline….
INBEV @~65/share
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