Anheuser-Busch's board of directors will reject Belgian beverage giant InBev's $65-a-share takeover bid, a source told the New York Times. The rejection was expected, as members of the Busch family, U.S. politicians and citizens of St. Louis, where Anheuser-Busch is based, all made it clear they opposed the buyout.
The decision, however, does not signal an end to the drama over suds in St. Louis. To keep away of InBev, Anheuser-Busch will have to step lively:
In an effort to justify rejecting InBev's $65-a-share bid, Anheuser-Busch is expected to announce an extensive reorganization aimed at bolstering profits that will include cutting more than $500 million in costs, these people said.
The savings will come from reducing marketing expenses and possibly shedding assets like its Busch Gardens theme park business and its packaging unit. The reorganization, which is expected to include scores of job cuts, may anger some residents and politicians in St. Louis, where the company's headquarters is located, who had been pressing Anheuser-Busch to reject the bid in part to save local jobs.
In addition to average shareholders, the American beer company will have to justify its decision to people like Warren Buffett, reportedly Anheuser's second-largest shareholder. Buffett hasn't said publicly what he thinks Anheuser should do, but his Berkshire Hathaway stands to make a great profit from an InBev takeover and likely won't stay silent forever.
Read the rest of the New York Times story for more.