Air of inevitability hangs over AB deal | St. Louis Public Radio

Air of inevitability hangs over AB deal

Jul 11, 2008

This article first appeared in the St. Louis Beacon: July 11, 2008 - Budweiser may hold onto its title as the "King of Beers," but the local entrepreneur who soon could become St. Louis' King of Brewers said today the foreign takeover of Anheuser-Busch shouldn't mean "doom and gloom" for the region.

"It will have an impact, but I don't think it will be crippling," said Tom Schlafly, whose Schlafly microbreweries will produce an estimated 22,000 barrels of beer this year -- a figure Schlafly estimates is about 1/5,000th of the output of Anheuser-Busch.

"I'm still more negative than positive about this," he said of the proposed takeover, which would make Schlafly St. Louis' top locally owned brewery. "But where I would differ, I guess, would be in the magnitude of my negativity."

Even with the takeover, Schlafly said, he believes St. Louis can remain an international beer capital. He also doubts that local cultural institutions and other charities will see a dramatic drop off in support.

The brewery survived prohibition, but it seems as though it will not survive the Belgian onslaught.
Credit Tom Nagel | St. Louis Beacon archive

"We have survived other corporate takeovers," he said.

Schlafly was among several outsiders with ties to the industry or the brewery to weigh in Friday on the takeover.

Both The New York Times and The Wall Street Journal indicated the Belgian-based brewer InBev seemed to be inching nearer to closing a deal with the historic St. Louis-based brewing giant.

The Journal, citing a person familiar with the deal, was reporting that InBev had boosted its takeover offer by $5 a share, to $70, in an effort to encourage a friendly deal with Anheuser-Busch.

Officially, both companies remained mum on the matter.

Still, after weeks of trading public and legal jabs, it seems that the takeover was coming quickly to a head.

Ed Martin, whose website has gathered nearly 80,000 signatures of support for the brewery from around the world, said today that it appears the Belgian handwriting may be on the wall.

"I always thought if the dollar (offer) got high enough, it would become tempting enough," Martin said about the bid.

"You don't step in and offer the best price for a new house or a new car the first time out," he said. "I always expected an increase. It looks like it has finally come to a point where investors are seeing it as too much to leave on the table."

Martin said if the deal is completed he remains worried about the immediate future of the St. Louis area as a whole, but more specifically about the futures of those workers who depend on the brewery for their livelihoods.

He vowed to "continue to fight" even if the deal goes through, in an effort to keep harm to workers and the area at a minimum.

Also today, the former St. Louis Post-Dispatch reporters who 17 years ago wrote a tell-all book about the inner workings of the brewery and the Busch family, said a takeover would be nothing short of historic for the region.

"Through several generations, the Busches managed to succeed in a very competitive and tough business," said Terry Ganey, projects editor of the Columbia Daily Tribune in Columbia, Mo., and co-author of "Under the Influence, the Unauthorized Story of the Anheuser-Busch Dynasty."

"If InBev succeeds in acquiring Anheuser-Busch, it will be an end to a remarkable family and corporate saga," Ganey said.

Peter Hernon, an editor with the Chicago Tribune and co-author of the Busch book, said he grew up in the shadow of the brewery's South St. Louis plant and headquarters.

He played baseball, he said, at nearby Lemp Field, where he could smell the hops from the pitcher's mound.

"I can't help but be sad, disappointed that corporate reality has hit St. Louis," Hernon said today from his Tribune office. "That this incredible institution could be taken over by a company outside the United States is a hard to comprehend, but it's reality.

"But I've seen it right here, in my own business," he said of the recent change in ownership of the Tribune. "You see it everywhere.

"It's a fact of life, I guess, but I never prepared for something like this. It seemed that if the (Busch) helicopter was perched on the roof of the headquarters, then all was right with the world."

Hernon says he is most interested to see whether a change in ownership will have any effect on the type of product produced.

"I would wonder if they would make any change in the recipe," he said, "if they would give it a more European flavor.

"You have got to wonder what in the world would Adolphus (the Busch patriarch) be thinking," Hernon said.

In a news release distributed today by the group, Martin said his organization is demanding that St. Louis become the world headquarters of the new combined A-B/InBev corporation.

The release also said that was concerned that "poor choices by InBev" might lead to "boycotts and loss of market share for A-B brands."

Martin said he believes money spent in the takeover will plague InBev for years to come.

"It's like a rabbit being swallowed by a python and it will take five to 10 years for the debt to work through the python."

As a result, he said, he expects the brewery's stock to be stagnant for the foreseeable future.

"Losing Anheuser-Busch will be a terrible psychological blow," Martin said. "It will be just one more thing that is changing, one more thing we will long for in the future."

Schlafly said there is a small silver lining to a takeover, at least from a personal standpoint.

He said it might be easier to get his product into certain local bars and festivals than it has in the past.

He also said that it could allow him finally to get his beer into the Edward Jones Dome.

"My guess is that some of the venues that freeze us out now will have a little less political support for doing so in the future," he said.