From the New York Times:

 “Deal for Anheuser-Busch Is Said to Be Near"


Published: July 11, 2008

In a reversal of its previous hostility to the idea, Anheuser-Busch is in active talks to sell itself to the Belgian brewer InBev in a friendly deal, people briefed on the matter said Thursday night.

Exact terms of the potential deal could not be learned, but one person said that InBev had indicated that it would be willing to pay more than the $65 a share it had originally offered. People briefed on the deal cautioned that the talks might still break down.

In striking an agreement, Anheuser risks a political backlash from the growing number of hometown politicians and customers who had supported the company in its efforts to remain independent.

Helping to drive the deal talks was the indication that some of Anheuser’s largest shareholders, including Warren E. Buffett, were leaning toward backing a deal with InBev.

If a deal is reached, it would end more than a month of hostilities between the two beer giants and create the world’s largest brewer. It would combine Anheuser, the maker of Budweiser and a fixture in American culture, with InBev, the producer of Stella Artois, Beck’s and Bass, creating a new behemoth with distribution channels around the world. 

Since InBev unveiled its original $46.3 billion, $65-a-share offer in June, however, the two sides have waged a very public and very bitter brawl. Both companies have sought to press their case in court: InBev has sought to oust the American company’s board, while Anheuser accused the Belgian brewer of lying about its financing commitments and criticized it for having operations in Cuba.

The fight is set against a backdrop of rising prices for beer ingredients like grain and a rapidly consolidating beer industry. Giants like InBev and SABMiller, the world’s two largest brewers — which were themselves the products of mergers struck this decade — have raced to outstrip each other in market share. Though SABMiller, based in London, currently holds the No. 1 position, an Anheuser deal would propel InBev to the top spot.

While the United States remains the world’s largest beer market, domestic brewers have struggled in recent years as their customers drift toward wine and spirits, as well as craft beers and imports. That has tempted the international brewers, as has the weak American dollar. SABMiller and Molson Coors will combine their operations in the United States, forming a formidable rival to Anheuser.

InBev has been mindful of the political pitfalls that could befall a hostile bidder for an American icon like Anheuser. The company said that it would keep St. Louis as its North American headquarters and would try to keep the Anheuser name somewhere in the combined brewers’ new title. Yet on Monday, InBev said that it would begin to canvass Anheuser’s shareholders, seeking their support in ousting the company’s directors. It named an alternate board, including a dissident member of the controlling Busch family.

August A. Busch IV, Anheuser’s chief executive and a scion of the company’s longtime owners, has consistently said that InBev’s offer is too low. But he has felt pressure to enhance his company’s long-stagnant stock. To counter InBev’s claims that it could bolster Anheuser’s bottom line, Mr. Busch and his management team have said that they will cut the company’s work force by as much as 15 percent.

Anheuser has also sought to stymie InBev’s efforts to dislodge its board with its own lawsuit, filed on Tuesday. The company accused its suitor of lying about the firmness of its lending commitments, drawn from a group of eight international banks including JPMorgan Chase. It also argued that because of InBev’s current brewery operations in Cuba, the combined company would run afoul of American trading prohibitions against the island nation.”

Analysis?  Well, eventually, the more money you offer, people start to see things differently.  The whole cuba thing’s pretty silly though.  Cheers!

LEMP. A Haunting History.

“This Lemp’s for You.”  If fate had played a kinder hand to the once dominant Lemp family brewing dynasty, we could indeed have been hearing that slogan instead of the famous version serenading us from our televisions today. Instead, the family suffered a tortuous series of tragedies, some of their own making, and has all but disappeared from most people’s memories. The story of their family and its rise and fall reminiscent of the most classic tragedies, is told by Stephen P. Walker in his incredibly researched book, Lemp: The Haunting History.

In 1840, German immigrant Adam Lemp opened his Western Brewery in St. Louis based on the popularity of the beer he had been brewing on a smaller scale in his grocery. In those days, brewers were much like neighborhood bakers, with local patrons picking beer up on their rounds of errands. Lemp’s decision to open a brewery was forward thinking, and took the operation to levels not commonly seen in those days. The brewery flourished, then more so once Lemp’s son, William, took control of the company. Under his leadership, the brewery grew with astounding speed, and he quickly moved to a larger facility to increase production. He chose a parcel of land directly above a series of caves his father had used to store beer. By the turn of the century, the now named William J. Lemp Brewing Co. covered 11 city blocks and produced 500,000 barrels of beer a year with distribution throughout all of North America and reaching Australia and Europe. The brewery produced six beers, the most known today being Falstaff. At this point the Lemp’s were larger and more influential than the Anheuser- Busch Brewery, who began business nearly two decades after they did.

Tragedy entered the family when Frederick Lemp, William’s heir apparent, died suddenly at age 28. Disconsolate, William fell into a deep depression and took his own life in 1904. The family soldiered on, but the tide had turned and time began to pass them by. Then the advent of Prohibition devastated the family business and they were forced to sell off assets at alarmingly low returns. William Lemp Jr., who had stepped into the leadership role after the deaths of his father and brother, became a high roller in St. Louis society and his divorce in 1920 provided scandalous gossip for the entire city. However, it was the disaster of Prohibition that defeated him. He, also, took his own life in 1922, as his sister Elsa had also done in 1920.

Despite the efforts of William Lemp III to re-introduce the brewery after Prohibition, the attempt failed. He died tragically in 1943 at age 42 of a cerebral hemorrhage. Another brother, Charles, also committed suicide in 1949.  The famous label of Falstaff Beer was purchased and continued to be sold for a while under different owners until ultimately fading away. 

All of this is told in detailed and fascinating accounts, often through written first-hand entries, by Walker. Letters of the Lemps themselves are quoted and newspaper articles of the time are reprinted. Walker also includes many examples of the famous Lemp advertising art and intricate descriptions of the lavish lifestyle and homes of the family. It’s a fascinating look at a chapter of American history, as well as brewing history, that is often overlooked.

Walker concludes with some accounts of ghostly goings on at the Lemp Mansion, which is now open as a bed and breakfast ( Considering the history of the family, it’s almost to be expected that they would continue to haunt the scene of their greatest triumphs and failures. We’ll be visiting here with our cameras, no doubt.

A great read and highly recommended:

        4 and a half pints out of 5!

        Unfortunately, the book is out of print, but readily available . A great resource for anyone interested in any aspect of the brewing industry.