Anheuser Busch Merging With Miller?

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ST. LOUIS, MO (KPLR)-- Could Anheuser Busch be on its way toward merging with longtime rival Miller?  That’s what some financial analysts are predicting  as a beer industry rumor is starting to gain some credibility.  Many liken the concept to the Catholics merging with the Protestants, or the Cardinals and Cubs joining forces.  But Bloomberg news is quoting European financial analysts who think this could really happen.

At bars like the Dry Dock in south St. Louis County, they bleed Budweiser red.

“If you want Miller, go to Milwaukee,” Steve Boyer told us while sitting at the bar Thursday night.

They have been serving A-B products here since 1890.  Only in the last decade did they finally allow anything with “Miller” printed on it behind the bar.

“It was a big deal,” long time bartender Heidi Kveton said, “because the Dry Dock has always been an Anheuser-Busch bar, and that’s all he wanted to serve.”

But the talk of A-B and Miller landing under the same flag is suddenly getting serious.  Bloomberg News quotes influential financial analysts in Europe, telling their customers such a mega deal may be on the way.  Major investors in Inbev are putting their shares in Burger King on the block.  That could free up more than a billion dollars in cach.  This is an excerpt from that Bloomberg report:

“"Over the past week, AB InBev’s Belgian and Brazilian reference shareholders have freed up considerable amounts of cash," Wim Hoste, an analyst at KBC in Brussels, said in a note. The moves could be "a coordinated attempt to be followed by a fresh cash injection into AB InBev. We see only one brewing acquisition likely that would be large enough to warrant a capital increase, and that is SABMiller."”

“It would be a giant behemoth of beer,” St. Louis Post-Dispatch beer business writer Tim Logan said. “One in every four beers drank in the world would come from this company.”

And while he says this is all likely a long way from happening, it does fit the InBev pattern.

“InBev has always been an acquirer.  They’ve grown by buying companies and the last big thing for them to buy at this point is SAB Miller.  And it seems to be picking up momentum.  There’s been more chatter about it in the last few weeks than there had been, and where there’s smoke there might be fire.”

At Randall’s Liquors in south St. Louis, beer buyer Dominic Martino worries about one thing:  prices.

“Having a large conglomeration of beer, beer company I guess, that would control so much of the product that gets consumed in America. I think that’s a little bit concerning as far as price gouging that things like that.”

A-B InBev has not commented on the merger talk, and SAB Miller hadn’t either until its C.E.O., Graham Mackay was hit with the question by a reporter for “Beer Business Daily,” a trade publication.

“What can I say? I'll tell you what I tell my shareholders who ask the same question. Look, they would have to write a very big check indeed, something north of $100 billion and that's a lot of money in anybody's language. ... There's a question of whether they can raise it in this environment. ... But it's my job to make it very expensive for them.”

“Not exactly a resounding ‘no’” Logan mused in his Lager Heads blog on the Post Dispatch’s website.

Regardless of what happens, some things are unlikely to change.  Among them, brand loyalties that, in St. Louis, reach almost to the point of a moral compass.

Still sitting at the bar of the Dry Dock, Boyer dismissed the impact of a merger on his life.

“It doesn’t really matter because I still wouldn’t drink Miller,” he said.  “It doesn’t matter if they’d stack it up in my truck, I wouldn’t drink it.”