Buy Dethroning the King: The Hostile Takeover of Anheuser-Busch, an American Icon
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Dethroning the King by FT journalist Julie MacIntosh is a corporate drama starring August Busch III (The Third), his son August Busch IV (The Fourth), Carlos Brito and a pack of ambitious Brazilians, the Mexican family owners of Modelo (Corona), and a slew of M&A bankers, lawyers, and consultants.
Reading The World is Flat by Thomas Friedman changed my life in making me consider a career outside the United States. Most of my family and friends thought I was crazy. They couldn’t conceive of any career opportunity abroad – especially Latin America. Americans are infamous for their insularity. Of all American cities, St. Louis may be the most insular. A medium-sized, conservative city located in the exact center of the country, it’s the furthest major city from any US border. The foreign buyout of St. Louisan Anheuser-Busch, once the world’s largest brewery and brewer of the iconic Budweiser brand, is a case study in American insularity.
This story is personal to me for three reasons:
- I worked for Anheuser-Busch for two years, gaining an inside look at the culture.
- My career mentor worked among the highest level executives at A-B, and was involved in the international negotiations with Brazilian and Mexican breweries described in the book.
- A crazy oath I swore at a coincidental, drunken encounter I had with InBev sales reps in Brazil in 2007.
My Time at A-B
I studied business at the University of Missouri-St. Louis and, if you surveyed those business grads at that time, 90% would have listed Anheuser-Busch (brewer of Bud/Bud Light, Michelob, Busch, Natural Light) as their top choice of companies to work for. In St. Louis the company was renowned as being a benevolent employer. From the book:
“Most of these people are from St. Louis, and this is, like, the dream,” one of the executives said. “They’re the gentry class in their community. They grew up in south city with nothing, and here they are working at A-B. They’re giving beer to their friends on the weekend and are the heroes of the neighborhood … I’m not trying to be trivial, but this is how the psyche is in this town.”
In addition to high salaries, the perks were unbelievable. Every employee received two free cases of beer every month. They got all the best tickets in town – sports, concerts, etc. They only flew first-class. A-B always had the best commercials at all the Super Bowls. They had over 50% of the U.S. market when I got hired. It was a cool company to work for, and it came with status. Working for A-B made you a nobleman in St. Louis.
From the book:
For decades, the aviation-loving Busch men and other staffers had hopscotched around the country on the company’s own fleet of sleek, leather-outfitted Dassault Falcon corporate jets. It got to the point for a while where even the wives of strategy committee members hadn’t flown commercial in years. To keep “Air Bud” running smoothly, the company had its own flight operations department with a staff of 20 pilots, plus mechanics and other workers, all operating out of a spotless private hangar at the Spirit of St. Louis Airport.
When they weren’t flying private, Anheuser staffers flew first-class. “I want my employees at the front of the bus everywhere they go,” August III used to say when he was CEO. “They should feel very important.” First-class flights were essentially company policy, and the perk stretched far down the pecking order.
My first year I was a Contemporary Marketing Representative. That means I went to bars and gave away trinkets. I was the free T-shirt-and-keychain guy, and even I flew first-class when they pulled me out of Southern California to work the 2004 Super Bowl in Houston, Texas. That’s the only time I’ve flown first-class to this day, and I was a fresh-out-of-school, T-shirt-and-keychain kid. Here’s more on expenses:
Trips to New York meant stays at the glitzy Pierre hotel and $1,000 dinners. Visitors to St. Louis were treated to suites at the Ritz-Carlton. Still, the money Anheuser-Busch spent wasn’t all for the home team’s personal enjoyment – it also spent copious amounts of cash on its breweries, its theme parks, and even its Clydesdale horse operations to ensure that it had the best beer-making technology, the cleanest bathrooms, and the freshest paint jobs and flower arrangements available.
The Clydesdales lived better than many people in developing countries. They’re American icons. A-B also owned SeaWorld, Busch Gardens, and Grant’s Farm. The company culture emphasized top quality. Not a dollar was spared.
With all those perks came firebrand loyalty among employees. My class of entry-level marketing employees were put through an intensive, week-long brainwashing course to get us fired up about the brands (hosted at the Chase Park Plaza). During the brainwashing, I got drunker than anyone else in the class on the company Kool-Aid. I was rabid for Budweiser. I thought anybody who would drink Miller or Coors was scum. On a double date with my gringa ex, her friend ordered a Miller Lite. In the car I told my girl that I would NOT go out with that couple anymore. That’s not an exaggeration of the mentality in the company. Employees were ostracized if they were seen with a competitor’s beer. But that never happened, because everybody was as hardcore as I was.
After a year of marketing in bars I moved to the only position that could be considered a demotion – off-premise merchandising, the absolute bottom rung of the beer business. Up until this point, I’d worked in on-premise retailers – places where you buy liquor and drink it on premise (bars, restaurants, clubs). Off-premise retailers are places where you buy liquor and leave – grocery stores, liquor stores, etc. And that’s when my hardcore attitude went soft.
An important dynamic of on-premise drinking is absent in the off-premise. Bars and clubs are social. People go to meet new people, to see and be seen. The drink in your hand says something about you. It’s a statement. Picture the typical Coors Light drinker vs. the guy with a Heineken. The Coors Light drinker is a hick in jean shorts with a used pickup truck worth less than the Heineken guy’s monthly salary. My job as the T-shirt-and-keychain guy was to make it cool to be seen with Budweiser and Bud Light. I not only had t-shirts and keychains though; I also had an expense account. In addition to giving away the goodies, my job literally was to party with people and buy them beer. That created positive attitudes toward the brands.
In off-premise, however, image doesn’t matter. Most people are going to drink at home with friends or family. They have no image to project. All the brand Kool-Aid I’d drunk, all the belief I placed in the power of the brand – all of that eroded away working in liquor stores. Learning the tricks of off-premise led me to believe the opposite of what I’d been indoctrinated with – that consumers don’t care about their beer brand.
Beer demand is elastic in regards to pricing. I saw stores put 12-packs of Miller on sale for $8.99 (one dollar off, or 10% discount), and their sales would shoot up 20-30%, even more. There’s little brand loyalty in beer, at leats between the American macrobrews.
Another off-premise tactic is shelf strategy. Where is your brand when you open the door to the cooler – on the handle or hinge? If you switch the product closest to the handle with the product on the hinge, you’ll see a positive sales trend for the new brand on the handle, and a negative one for the brand on the hinge. Gaining floor space will also affect a change. Let’s say Bud and Miller each have ten square feet next to each other on the floor in a liquor store. If Miller doesn’t fill that space from their back stock, then filling it with Bud products will affect a positive sales trend.
For someone who believed so much in the power of the brand, these trivial differentiators were blasphemy. And the off-premise accounts sell the vast majority of total beer, outselling on-premise 10-1. I couldn’t help coming to the conclusion that beer is a commodity. All that brand value stuff I’d learned was largely bullshit. Beer, or at least the American macrobrews, are similar to a commodity.
So I felt I was pushing a commodity – fighting tooth-and-nail over floor space, shelf location, and dollar discounts. I increasingly felt everybody was battling for the same nickel, the same inch of space. The industry was 100% less interesting, so I left.
In 2008, three years later, InBev offered $65 per share to acquire Anheuser-Busch, shocking the city of St. Louis. It was a difficult offer because the stock price had been stagnant at $50 for almost ten years. How could Anheuser-Busch not accept the offer?
How could InBev justify paying that much? In direct contrast to Anheuser-Busch, InBev didn’t spend lavishly. It was headed by Carlos Brito and a cadre of Brazilian bankers who worked as hypereffective cost-cutters. They closed centuries-old breweries in Europe and became an efficient holding company that just happened to sell beer. InBev management believed there were $1.4 billion to cut from Anheuser-Busch operations. They treated the beer industry as a commodity. From the book:
Under Brito, who had a Teflon-like resistance to the trappings of corporate wealth, InBev had never been a cushy place to work. The company earned its reputation as the “Wal-Mart of brewers” not long after it was created, and Stanford business school graduate Brito and his legion of American-educated MBAs took number-crunching and analysis to the extreme – to the point where critics argued that they were ruining the beer business.
Brito, a protege of Jorge Paulo Lemann‘s, worked in an open floor plan office at a large table, surrounded by the staffers who reported to him. He decried anything that could be viewed as a symbol of professional status, and flew coach class on all the longest airplane trips. As he liked to point out, most of InBev’s beer-swilling customers didn’t fly first class either.
In Anheuser-Busch’s heyday, its executives bunked down at the sumptuous Pierre hotel, which is perched on New York’s Fifth Avenue at the southeast corner of Central Park. Brito, however, abided by the same hotel policy InBev enforced for its whole organization, which meant that he wasn’t staying at the Four Seasons while his underlings set up house at a local tourist trap. He stuck to a more pedestrian class of hotels – the kind in which it made sense to check behind the headboard for bedbugs, just in case. Before AmBev merged with Interbrew and the Belgians put their feet down on the matter, the Brazilians were even said to have bunked in pairs on some business trips to save money.
Given the importance of status in Latin America, it’s ironic that the Americans are the flashy ones and the Brazilians frugal and informal.
In Contemporary Marketing, I had a $300 weekly expense account for the bars. After a few months, I learned the $300 was more of a minimum than a maximum. One week I spent $1500 and didn’t even receive a phone call about it. Cutting costs was never a concern at A-B. So if bankers were put in charge, they’d find lots of fat to trim:
One advisor put it, “Wildly failing at the management of expenses, their margins were ten points higher than Procter & Gamble’s.” Plenty of things could be done differently – or not at all – to generate more money, and InBev was bound to point them out if Anheuser-Busch didn’t find them first. Anheuser had been floating along in its own little free-spending bubble for decades as the real world had developed around it.
“The company was just so overstaffed, and always had been,” said Harry Schuhmacher. When Anheuser-Busch executives made appearances, he said, “they brought 14 people with them. They brought a guy with a laptop, a guy with a spare laptop, and a guy with a spare for the spare laptop. They brought their own teleprompters, and five bulletproof Suburbans would pull up. It was just crazy expensive … That kind of culture was ripe for the picking.”
In 2006 the two companies signed an agreement where A-B imported InBev beers. This created a working relationship between Carlos Brito and A-B CEO, August Busch IV.
“It gave them an inside snapshot of how bloated the company was, because we had these guys following us around for a couple of years,” said a former Anheuser-Busch executive. “They saw all of the executives coming in on corporate jets. They were just appalled at the excessive corporate overhead in the company.”
“I think they were able to see the extent of what they could cut when they got in,” the executive said. “Despite the worldwide economic meltdown, it gave them the strategy and the belief that if they could get the deal done, they could realize the cost savings.”
I left because I stopped believing in the brand power, and started to believe the American macrobrews were a commodity. I never thought about the company spending and how it fit into such an industry. Do big corn farmers only fly first-class and stay at the Ritz? Do the execs who market Bic pens have private jets? This email from my career mentor:
The Third was almost delusional in his belief that only a legacy beer guy could effectively run a beer company. I remember when we first met Marcel and Jorge Paulo, the Third scoffed at them — investment bankers who knew nothing about the beer business and who would either screw it up or flip it within a few years. The Third never bought their early articulated vision of a consolidated industry with just a few worldwide beer companies.
In a globalized economy, breweries need global economies of scale.
It’s been four years since the buyout of this lavish, benevolent employer by the cost-cutting bankers who view beer as no more important than pork bellies or cotton. While A-B coasted on American profits, living fat in America, the young Brazilians made the international moves to beat them in their own back yard.
A-B & Brazil
My mentor has advised me for almost seven years in every step of my career, all the successes and failures: moving to South America, English immersions, tours, exports, writing, everything. He also gave me an inside look at the inner workings of the highest levels of Anheuser-Busch when he worked there. He paints a picture of an August Busch III extremely uncomfortable outside American borders. This is a man who wore cowboy boots to the office. He didn’t trust anything from Latin America. This anecdote from their talks in Brazil:
The dinner was with Antarctica either shortly before or after our 5% purchase in the company. The Third indeed went to the big semi-formal dinner at the hotel ballroom hosted by Antarctica but refused to eat the mystery fish served that night. After the dinner the Third and the entire A-B entourage sat around the hotel pool having beers. The Third decided to order a well-done steak sandwich or something like that (obviously he was still hungry). Unfortunately, his food order showed up at exactly the same moment the Antarctica execs strolled by.
After A-B bought 5% of the Brazilian brewery, Antarctica merged with its only competitor, AmBev, to create a monopoly in Brazil. That’s when Jorge Paulo and Marcel visited St. Louis – to pitch the Third on joining forces between A-B and the new Brazilian monopoly. My mentor has an anecdote from when the Brazilians visited St. Louis:
So the Third is leading the brewery tour with Jorge Paulo and Marcel with the specific objective of intimidating them — as in “no bankers could ever possibly run a beer company.” When we arrived in the QC room for arriving materials, the Third grabs a handful of malt and sticks his nose into it — I mean really sticks it in — and is obviously not pleased. Gerhardt notices and starts sniffing too, although it’s clear he is not smelling whatever the Third is. This all results in a big huzzurah where the Third barks out orders to send the malt back and reprimand the supplier. Later the entourage is sitting in a conference room having a beer and August leaves for a phone call. At that point Marcel looks at Gerhardt and says “Was there really something wrong with that malt or was that all just a show for us?” I knew at that precise moment that these guys were not going to be easily hoodwinked.
From the book:
The Third couldn’t stomach the concept of a tie-up that would put the Brazilians in charge outside the United States. So when Brahma and Antarctica decided to join forces, Anheuser-Busch backed itself out of the situation.
The Third decided to sell A-B’s stake in Antarctica, and left Brazil for good. He turned his focus back to the American market. He had opportunities in other emerging markets, but passed on almost every one.
“Part of it was that we were already the world’s biggest brewer,” [a person close to the company] said. “I don’t think [the Third] ever saw the threat coming from the outside. I think he was always looking more toward the inside. For whatever reason, The Third didn’t want to take that level of risk. It’ll be one of those things he’ll take to his grave.”
To compete in the new, globalized brewing market, Anheuser-Busch needed economies of scale – the cost savings big companies can generate relative to their smaller counterparts. While its rivals grew into brewing behemoths, Anheuser-Busch engineered its own destruction by becoming overly dependent on American consumers and turning its back on hundreds of millions of increasingly affluent drinkers around the world.
“The Third screwed the whole company up,” said one Anheuser-Busch advisor. “Remember, InBev was ‘this’ big, SAB was ‘this’ big, and they were ‘this’ big,” he said spreading his hands farther and farther apart as he named each brewer. “Anheuser stayed that big. Remember, the first deal that AmBev, the Brazilians, tried to do was a merger with Anheuser-Busch way back when, and he threw them out. Then they went and did the Interbrew deal. He never globalized. He turned down every single opportunity.”
“They just completely missed the boat when eastern Europe opened up, and when there was growth in Latin America,” said Harry Schuhmacher. “They did have an early cue in China, but as far as the rest of the world, it really allowed SABMiller and then later InBev to just take all of those opportunities. That was just the culture. It was a Midwestern culture of conservatism, insularity and cronyism.”
When I was hired, Anheuser-Busch had long been the biggest brewery in the world. But in the short time I worked there, it slipped two notches:
In 2004, Anheuser-Busch, whose employees had long boasted about working for the world’s largest brewer, abruptly lost that title. AmBev, whose proposals for global domination Anheuser had shunned, announced that March that it would merge with Belgian brewing giant Interbrew in an $11.4 billion deal to create the world’s top brewer by volume. SABMiller outstripped Anheuser in size not long afterward …
The company – once the world’s top brewer – had slipped into fourth place because of the insular, America-centric strategy it had espoused in recent decades, and it now appeared vulnerable. Its corporate planning committee, though, had repeatedly run the numbers and determined that Anheuser-Busch was simply too expensive to buy. The concept seemed too illogical to entertain. How could Budweiser, a beer synonymous with American culture, ever be brewed by a Belgian juggernaut whose executives spoke Portuguese at the office? It was unthinkable.
It was unthinkable in St. Louis and among A-B employees. Even after I left, I never imagined that could happen:
“[I]t was outrageous that someone would come in and buy Anheuser-Busch. There was a certain level of thinking that it just wasn’t possible, that no one could possibly afford it.”
Imagine the shock – the horror in St. Louis – when InBev formally offered $65 / share. The unsolicited bid came as a wake-up call to the company if they were going to fend off a hostile takeover:
The most frustrating thing for The Fourth and his management team was that the problem they now had to fix – Anheuser-Busch’s woefully inadequate global strategy – was a problem his father had spent nearly three decades creating. After The Third reached his life’s goal and seized half of the U.S. beer market, Anheuser-Busch had run into a significant dilemma. What came next? The Third had trained his eyes so unflinchingly on crushing Miller in America that he seemed either blind to what was going on in the rest of the world or simply uninterested. That hubris – that callous disregard for Anheuser-Busch’s global competition – now looked foolish and small-minded.
All of the hours Anheuser’s top executives spent chasing diversions like snack food and hot dog buns hurt the company where it needed help the most – brewing and selling beer in other countries. Unlike most consumer goods giants, Anheuser-Busch didn’t employ a raft of worldly, well-traveled staffers who had strong views on its global growth strategy. Rather, The Third sometimes used the international unit as a place to park employees who didn’t meet his standards elsewhere.
MacIntosh compares A-B’s dilemma with the rest of the country:
Anheuser’s hubris and naivete had led to its fall from grace, and it provided an apt comparison to the broader state of America at the time. After years spent downplaying or ignoring developments in other parts of the world, assuming that its supremacy was a constant, America’s political and financial dominance were also at risk.
And when InBev’s hostile takeover was successful:
While InBev was the aggressor, Anheuser-Busch fell victim to its own insularity and hubris. It was too risk-averse, too provincial, too hemmed-in to an aging strategy, and too unwilling to accept that the world was rapidly changing whether it liked it or not.
Money talks, bullshit walks. Cash for shares is money; American pride and icon sentimentality are bullshit. How many other countries have had their signature brands gobbled up by gringo corporations? It’s only fair it happens to us too. And at that price:
[A] payout from InBev “basically gave the shareholders in cash on day one what we hoped to deliver them over three years, after a lot of hard work and a fair amount of risk,” Sandy Warner said. “So you say to yourself, they are more confident than we that they can get the costs out, and they’re really good at getting costs out.”
At the time of the takeover talks, my mentor wrote:
I agree, the deal will eventually close because there are too many pension fund managers salivating over $65 / share (not to mention me). A-B will be as obtrusive as possible, more for machismo reasons than smart reasons. The only people supporting an independent A-B are some employees (not sure all), local politicians and fairly ignorant people who are not even shareholders. I think you would be hard-pressed to find many non-employee shareholders who legitimately think the current company with current management can get anywhere close to $65 any time in the next several years.
On November 18, 2008, Anheuser-Busch sold to InBev for $70 / share.
The Brazilians didn’t waste time in sending a message that the party was over:
To honor Brito’s visit and pay him the respect it felt he deserved as the soon-to-be new chief, Anheuser-Busch arranged for him to stay in a suite at the cushy Ritz-Carlton. The Ritz wasn’t Brito’s style, though, especially since he was just about to start indoctrinating Anheuser-Busch’s staffers to InBev’s frugal way of life. He had flown commercial into St. Louis from New York’s LaGuardia airport.
“He had someone call back and say, “No, no no, I’ve already reserved a room at such and such a place – like the Holiday Inn,” said one InBev insider. “I think that’s when it probably, for the first time, hit home in St. Louis that things were going to be different.”
It didn’t take long for the layoffs to start in earnest. On December 8, 2008, three weeks after the deal was officially completed, InBev said it would cut 1,400 salaried workers in its beer-related divisions, about 6 percent of its U.S. workforce. Seventy-five percent of those cuts hit the St. Louis area. And they came on top of the 1,000 workers who took buyouts or early retirement. Peering out the front windows of Anheuser’s headquarters became a painfully demoralizing exercise.
“I’d look out and there was yet another person standing by their car, carrying a box, sobbing uncontrollably,” said Bob Lachky. “And there would be a security guard with them. They’d just run their butt right out the door. To watch it is vividly etched in your memory.”
One executive sent out a blast e-mail in early 2010 saying that his job had been discontinued. Some of the company’s salespeople were told long after the deal closed that they needed to fire a layer of staffers beneath them. They did so, only to discover that they were being demoted into those newly emptied positions.
Brito got to work quickly on a slew of other physical and cultural changes that caused almost as much consternation in St. Louis as the takeover itself. Rather than chipping away slowly at Anheuser’s layers of waste and making gradual shifts to keep employees from panicking, the Brazilians decided to blow everything up all at once. They took sledgehammers to the cushy, private offices that lined the hallways of Anheuser’s executive suite – offices that had allowed staffers to go days at a time without encountering their colleagues – and supplanted them with a sea of community tables and tightly packed desks. Brito had no quiet office, or even a desk, of his own, and he wanted his new North American operation to reflect that team-oriented mentality.
“It looked like they had thrown a bomb on the 9th floor,” one top executive told a Brazilian publication. “There was mahogany everywhere.” Secretaries were fired, the company’s luxurious furniture was auctioned off, and 40 percent of its employees’ 1,200 BlackBerries were taken away.
Within months, perks like free tickets to St. Louis Cardinals games and Busch Gardens disappeared, as did the free beer that Anheuser-Busch had distributed to employees and handed out to customers at its theme parks. “I don’t need free beer,” Brito had said. “I can buy my own beer.” The soccer park was signed over to the St. Louis Soccer United organization. A range of sports sponsorships were tossed to the curb. Even expenses like color printing and shipping kegs of beer via FedEx were curtailed. And Brito showed no qualms about tinkering with Anheuser-Busch’s holiest symbols while looking to make an extra few dollars. Roughly a year and a half after the deal closed, the company confirmed that it had quietly started to charge $2,000 per day for Clydesdale appearances, reversing Anheuser’s longstanding practice of absorbing most of the horses’ costs itself.
My mentor added another anecdote of the Brazilians’ symbolic cultural change. The Brewmasters were always a highly valued, exalted position within A-B. History, tradition, brewmasters, etc. In reflecting their commodity market approach, InBev changed the ‘Head Brewmaster’ to the ‘VP of Supply’.
Company morale plummeted. Animosity of InBev and Brazilians formed In St. Louis and A-B offices around America. I don’t believe Brito or the Brazilians cared. They were going to replace anybody who was making a lot of money anyway:
InBev acknowledged that the moves might disenfranchise staffers who didn’t appreciate its startup mentality.
Most people I still knew at the company has left or was laid off. And everybody from the cushy marketing gigs with expense accounts is gone – as soon as the buyout was confirmed.
St. Louis had fought Milwaukee for decades for the right to call itself the “beer capital” of America, but thanks to the Brazilians, that critical claim to fame vanished overnight. Residents who had always compared St. Louis to larger Chicago as an important Midwestern nexus began to worry that without an independent Anheuser-Busch, it could tumble down the roster toward the likes of Des Moines, Iowa.
I recently asked my mentor what the Busches are up to. His reply:
The III and IV have disappeared off the face of the earth. I suspect the III is out on his farm in St. Charles wearing camo and shooting at animals. The IV is probably holed up at the Lake engaging in strippers from that raunchy Osage Beach strip bar.
My Wild Promise in Rio
I’ve mentioned two ways I’m connected to this story:
- My time at the company
- My career mentor’s insider tales of the lack of international ambitions at the highest levels of management.
This is my third connection: my wild promise in Rio de Janeiro.
In 2007 I was studying for my Master’s. I had a two-week break in the early summer and decided to party with friends in Brazil. One chance night in Rio I was drinking with a bunch of InBev sales reps. I ordered a Sol, which is like Heineken in Colombia or Brahma in Peru, in that it’s the only beer with distribution that the national monopoly doesn’t sell. One of the guys grabbed it from my hand and gave it back to the bartender, and ordered me a Brahma on his tab. He was nice about it, pardoning himself and explaining that they work for InBev and only drink company products. I told him not to worry. I know exactly what it’s like – I used to work for A-B and I was the same way back then.
That sent all these guys into a frenzy. They couldn’t believe I worked for A-B and I was from St. Louis. They excitedly told me that A-B was in Rio as we spoke, for talks about InBev buying them out.
No way! – I swore. No way, now how, nobody will buy out A-B. My St. Louis pride – my American pride – wouldn’t let me believe it. The Brazilians insisted it was true.
To illustrate my self-assurance, I made a dramatic proclamation. I swore to them that if InBev ever buys A-B, I’ll make my career outside America – something I wasn’t considering in 2007. I had no fantasies whatsoever of working abroad. So it was a scary proclamation, but I meant it. Even when I thought about it after I sobered up, I reasoned that if my city’s flagship company – my country’s flagship beer! – were bought out by a company that didn’t even exist when I worked in the industry, then I should leave the States. If something like that happens, it’d mean America’s time has passed.
By the time InBev bought A-B, I was already in Peru. I only remembered this crazy oath after the deal finalized, after I was calling myself an ‘expat’, and after I had a blog called ‘Expat Chronicles’. I fulfilled my oath on accident.
I’ve left out two major themes from the book:
- A-B’s nuclear option
- The Shakespearean drama
The Fourth’s nuclear option in keeping A-B American and independent was to buy Grupo Modelo (Mexican brewer of Corona). They made amazing concessions in pressuring the controlling Mexican families to agree. When this was in the news, I dismissed it as impossible. I thought if they could buy Modelo, why hadn’t they done it before? The book tells how close a deal was, in which A-B would’ve stayed American. AB InBev bought Grupo Modelo in 2012 for $20 billion.
Last but not least, the Shakespearean drama between father and son – the Third and Fourth, the two primary CEO’s – is stranger than fiction. The take-no-prisoners, workaholic father who drove the company to 52% of the U.S. market, and the anointed playboy son known for partying and had been involved in the deaths of two young women. I always assumed the Fourth only ascended to his position because of his last name, but the book made me feel sorry for him. The drama between these two is the most compelling storyline of the book, but beyond the scope of this article. Here’s an ad featuring both of them, and the emphasis they placed on tradition and quality:
Here’s a perfect summary of that Shakespearean drama from MacIntosh:
Anheuser’s isolationist history drove the result in the end, and made everything that occurred during August IV’s tenure a footnote to a much bigger story. Anheuser-Busch’s fate was sealed not during his year and a half in office but during the decades-long span in which it was run by a man who couldn’t fathom that anyone else could fill his shoes. He ultimately ensured that no one did.
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Here’s a piece on the Fourth’s problems after the buyout:
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