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Shareholders Inbev and Anheuser Busch

Essay by   •  January 26, 2013  •  Essay  •  368 Words (2 Pages)  •  1,931 Views

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What are the priority actions to make this merger create value to Inbev shareholders ?

After the merger, Anheuser-Busch Inbev would become the world's largest producer of the beer. I believe that the newly merged company is in a good position to move forward and consolidate its newly acquired supremacy. It can derive its merger experience from the merger of Ambev-Interbrew. It can follow the similar path it followed during the earlier merger though it would have to customize the newly formed company to suit to the preferences of North American customers. The board can take the following actions to create value to the company's shareholders

Brand Portfolio

ABInbev offers a wide variety of portfolio of more than 300 brands including Becks, Stella Artois, Leffe Hoegaarden, Jupiler, Budweiser, Michelob among others. The company should draw plans on how it should leverage the brand portfolio to aggressively penetrate into the new and existing markets.

Find Common Synergies

The merged company should find the common synergies like the way it has done during Ambev-Interbrew merger. Cost savings can be made by leveraging the existing facilities of Anheuser-Busch to bottle the Inbev's portfolio of brands. There are also synergies that can be obtained in the Marketing area.

Follow work culture of Inbev

The newly formed company should follow the Inbev's meritocratic culture as defined by one of Inbev's shareholder, Jorge Paulo Lemann. There are significant cost savings to be made by doing away with luxurious executive offices, corporate planes and expensive perks the old company, Anheuser-Busch is known for.

Concentrate on growth in emerging markets.

Prior to ABInbev's merger, Inbev's share of revnue in Asia Pacific is 6.9% and Anheuser-Busch's share outside of United States is only 8%. I think there is a lot of potential for revenue growth in the emerging markets. With rising disposable incomes in countries like China and India, ABInbev should introduce its premium beers in these markets to earn greater profit margins.

New company should get into craft beer segment in the US market

Prior to the merger, US overall beer sales were flat though the craft beer segment witnessed

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