1. Was the $ 52 billion purchase price too high? Explain.
2. How did the value of Anheuser- Busch’s equity investments influence your answer to 1? Explain.
3. How did the value of Anheuser- Busch’s entertainment division influence your answer to 1? Explain.
4. Did the unfunded retiree health- care liability influence your answer to 1? Explain.
5. Did the outstanding employee stock options influence your answer to 1? Explain.
6. Which assets could InBev sell to help pay for the acquisition? Estimate the cash it could receive for the sale of those assets.
7. Is Anheuser- Busch’s explanation of its Grupo Modelo investment clear? Explain.
George Schneider established the Bavarian Brewery in St. Louis, Missouri, in 1852. Eberhard Anheuser acquired the brewery in 1860 and renamed it E. Anheuser & Co. A year later Adolphus Busch married Mr. Anheuser’s daughter, and by 1864 Mr. Busch had joined his father- in- law’s brewery.1
In 1876, the firm introduced Budweiser beer, and in 1879 changed the company name to Anheuser- Busch Brewing Association. The following year Mr. Anheuser died, and Adolphus Busch became president. As the firm grew, it introduced Michelob in 1896, its premium- priced beer. When Adolphus Busch died in 1913, his son, August A. Busch Sr., became president.2
In 1920, the National Prohibition Act against alcohol was passed, and Anheuser-Busch entered a wide range of markets, including ice cream, barley malt syrup, ginger ale, root beer, corn syrup, truck and bus bodies, refrigerated cabinets, and nonalcoholic Budweiser. When Prohibition ended in 1933, Anheuser- Busch resumed beer production and introduced the Budweiser Clydesdale horses.3
August A. Busch Sr. died in 1934, and his son, Adolphus Busch III, became president; when he died in 1946, August A. Busch Jr. became president. His son, August A. Busch III, became president in 1974, and in 2002 Patrick Stokes was named president and CEO. In 2006, when August A. Busch III’s son 42-year-old August A. Busch IV had gained enough experience, he became president and CEO.4