[IBU] St. Louis Could Lose Anheuser-Busch Ties

Wed May 28 11:58:02 CDT 2008

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St. Louis Could Lose Anheuser-Busch Ties
By Christopher Leonard, AP Business Writer
Manufacturing.Net - May 28, 2008

ST. LOUIS (AP) -- Residents here have grown accustomed to seeing local
corporations gobbled up by larger outside firms. But losing
Anheuser-Busch Cos. could be the cruelest cut of all.

The nation's largest brewery has long been a point of pride as a
hometown attraction. The company's massive red-brick brewery draws
tourists from around the country to see the Clydesdale horse stables,
brewing vats and Busch family memorabilia dating back generations.

Reports that the company might be purchased by Belgium-based brewer
InBev SA have residents worried they might lose a company as closely
identified with St. Louis as the iconic Gateway Arch.

''St. Louis has gotten to the point where we have the brewery and the
Cardinals -- that's it,'' said John Schute, owner of the Sage restaurant
and bar just across the street from the Anheuser-Busch brewery.

Like many St. Louis bar owners, Schute is loyal to the hometown brewer.
He only carries Anheuser-Busch products on tap, with the notable
exception of Guinness stout.

''They support us and we support them,'' he said. But Schute said his
customers who work at the brewery have been nervous that an acquisition
could mean job cuts. He worries InBev wouldn't only lay off some of the
company's 6,000 St. Louis employees, but it could also cut back on
expense accounts the employees use for meetings and meals at his
restaurant.

There's good reason to worry that InBev will make dramatic changes if
the deal goes through, said Juli Niemann, an analyst with Smith Moore &
Co. in St. Louis. While Anheuser-Busch has made strides to cut costs in
the face of rising ingredient prices, InBev has a reputation for making
new operations as lean as possible.

''The way InBev does it, they send in the surgeons and their scalpels
are sharp. And they cut and cut,'' Niemann said. Virtually every
administrative job at Anheuser-Busch headquarters could be on the
chopping block, she said. InBev would likely keep the company's
distribution network in place and probably wouldn't close the St. Louis
Brewery to tourism that helps build the brand name, she said.

St. Louis residents have seen one local company after another move their
corporate headquarters out of town. May Department Stores Inc. announced
in 2005 it would be purchased by Ohio-based rival Federated Department
Stores Inc., just after Pulitzer Inc., publisher of the St. Louis
Post-Dispatch, announced it would be bought by Iowa-based Lee
Enterprises Inc. More recently, brokerage firm A.G. Edwards Inc. was
purchased by North Carolina-based Wachovia Corp.

InBev has not yet made an official offer for Anheuser-Busch. But recent
media reports have cited anonymous sources close to the European brewer
who said the firm was considering an offer of $46 billion, or $65 a
share, for Anheuser-Busch.

If InBev makes such an offer, it could be too sweet to refuse for
Anheuser-Busch shareholders, even if executives oppose the move. The
stock closed at $56.75 Tuesday and has traded as low as $45.55 this
year.

''Nobody has seen $65 (a share) ever,'' Niemann said. ''The stock has
been as flat as two-year-old beer.''

Anheuser-Busch has been struggling along with other brewers in recent
years as consumers have turned to cocktails, wines and craft beers.
Rising ingredient costs have further pinched profits this year. Other
big brewers are consolidating to compete -- Miller Brewing Co., the
second-largest U.S. beer-maker, and No. 3 Molson Coors Brewing Co. are
planning to combine U.S. operations by midsummer.

If Anheuser-Busch is absorbed by InBev, many St. Louis residents worry
the new company won't have the same dedication to charitable giving and
supporting the city's cultural life. The brewer supports local festivals
like the downtown Mardi Gras parade and a new beer heritage fair in the
city's Forest Park.

''Anheuser-Busch does more for the community than anyone knows,'' said
Andy Lohr of Lohr Distributing Co., which distributes the brewer's
products in St. Louis. Lohr was making the rounds Tuesday and said his
customers have been abuzz with worries about a possible InBev purchase.

Schute said he's taking a wait-and-see approach. He laughed at the
thought that the downtown Busch Stadium, home of the Cardinals, might
one day be renamed InBev stadium.

''If we're lucky, they'll keep the brewery here,'' he said.

Thank you.  

Steven Becker 

Pioneer Hi-Bred International 

A DuPont Company 

7200 NW 62nd Ave.

P.O. Box 184

Johnston, IA 50131-0184

515-270-3425 

steven.becker at pioneer.com 

www.pioneer.com <http://www.pioneer.com/>  

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