Reuters Hinting At Possible ABI/SABMiller Merger

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Rumors and discussions of a possible merger between Anheuser-Busch InBev and SABMiller are nothing new, it’s been talked about by the business press off and on for a number of years now. But it had been quiet lately, most likely because of the deal by ABI to buy Grupo Modelo. But yesterday Reuters fanned the flames of merger once again, in a piece of speculation: Bets on for mega brewer merger as virgin ground shrinks.

With the acknowledged bullet points that “Asia main area with assets left to buy,” and that the ABI and SABMiller would combine the “growth markets” of Africa and Latin America,” they put the price for ABI to buy SABMiller at at least $100 billion. According to Reuters:

Now, with AB InBev planning to return to a comfortable pre-deal debt-to-EBITDA ratio of below two next year, industry experts are betting on a combination of its Budweiser and Stella Artois brands with SABMiller’s Peroni and Grolsch. Some expect a deal within a year.

“It’s more a question of when, not if,” said a banker who has worked on drinks deals. Others, also speaking on condition of anonymity, cited AB InBev’s record as a serial acquirer and the need for a target to match or surpass its $52 billion purchase of Anheuser Busch in 2008.

Asia, they claim, is the next frontier, though many of the bigger breweries are state-owned (which means expensive). Interestingly, while they admit that SABMiller would also be expensive the Reuters’ business analysts believe “a tie-up would be straightforward with antitrust issues relatively easy to fix and immediate benefits of scale.” Other analysts, however, do see potential problems with the merger from “regulators is in the United States and China” because of the market overlap in those countries.

Price, not surprisingly, is the elephant in the room, and the estimated $100 billion ticket price would make such a deal the “fifth-largest corporate acquisition ever.” Reuters places the current value of SABMiller at $84.5 billion and believes it’s in ABI’s best interest “to move fast before SABMiller gets more expensive.” But would SABMiller be interested in selling? “SABMiller’s two top shareholders — cigarette maker Altria Group and the Santo Domingo family of Colombia, which own 27 percent and 14 percent, respectively — ‘may think this is as good as it gets,’ said another banker.” So that suggests that the people behind the curtain might be amiable to the buyout. A couple of years ago, writing about this very possibility of a merger, I recalled that when the AB/InBev merger went down, someone joked that eventually there would be just one international beer company and it would just be called “Beer.” I remember laughing at the time, but truth really is stranger than fiction. So who knows? It should be an interesting year.

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ABI Beer Brands …

plus …

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SABMiller Beer Brands …

Equals = ?

A-B InBev Trademarks 40+ Airport Codes

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Here’s a strange development. Remember Anheuser-Busch InBev filed trademark applications for over a dozen telephone area codes a few months ago. Speculation ran high that they were planning on duplicating the success of their recent acquisition, Goose Island Brewing, and their 312 Urban Wheat Ale, named after the local Chicago area code, but nobody could say for sure. This past Monday, the U.S. Patent and Trademark Office granted ABI a 6-month extension to submit their mandatory “Statement of Use” forms, meaning we’ll have to wait a bit longer to discover exactly how they’re planning on using those area codes.

Pro Brewer is now reporting — though the original sources are Evan Benn on St. Louis Today and Jenn Litz at Craft Business Daily — that ABI has spent over $12,000 filing similar applications to lock-up over 40 airport codes, including “LAX (Los Angeles), SFO (San Francisco), MIA (Miami), BOS (Boston) and LGA (New York LaGuardia).” Again, no word on what the plan is for them, but it would have to be for a beer name, wouldn’t it? What else could it be? Surely not just making sure no one else uses them? ‘Cause that would be kinda evil. What’s next, famous zip codes? Two-digit state codes? There was a great joke Lily Tomlin used to tell in her stand-up act. “I love it how New York City named their streets after all the famous numbers.”

Lagunitas IPA Brewed At Anchor

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If you were following the twitterverse closely on Tuesday, you might have noticed an interesting story developing, as relayed in tiny bites by Lagunitas owner Tony Magee. I’ve rejiggered the twitter stream, re-ordered it, uncompressed abbreviated words, and added additional ones for clarity in an attempt to make it a more coherent story.

“We had a crazy strong 4th quarter 2011 and are nearly MAXED! out right now. This could cause SERIOUS supply problems as Spring approaches.” As you may recall, “our new brewhouse,” specifically the “Lauter Tun, was savagely attacked by a crane in the mid-Atlantic and that has delayed the start-up by a about a month. Working on the new brewhouse installation and all the plant improvements have been my whole life for the last year, so, for me, it’s personal!” I “don’t want to disappoint friends, customers, retailers, or distributors” and “since the cool new owners of Anchor have become our friends,” and “since their brewers are totally the most experienced Craft Brewers anywhere on Earth, I asked them if they could help us somehow.” They magnanimously said yes, “so we’re working with them right now to brew some IPA draft for us. Can you dig that? Anchor Brewing! Its’a STRAIGHT-UP honor that Anchor is willing to help us through this two-month hump. It is great to have such friends on this crazy competitive left-coast! I love this career. Imagine; working with the brew-co father of us all.”

So that sounds intriguing, right? Lagunitas brewing in the cooolships at Anchor?!? I spoke to Anchor co-owner Keith Greggor, who confirmed that’s exactly what happened. He stressed that we shouldn’t read too much into it, it’s just one brewery helping out another, which is great, I think. So for the next couple of months, head brewer Jeremy Marshall will, from time-to-time, be overseeing Lagunitas IPA being brewed in San Francisco.

They’ll be brewing IPA for draft only there, at least until the new brewhouse in Petaluma can be completed. That also means that shortly, when you an order a Lagunitas IPA from a keg, it could have been brewed at Anchor. As far as I know, this is the first time a non-Anchor beer has been brewed on Anchor’s system at their present location. Now this is a great example of our community, where a brewery can set aside any competitive impulse and help out a fellow brewer in need. As Greggor said. “It just felt like the right thing to do. You help your friends.” How cool is that?

Anchor Teases About New Beer Series

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Anchor Brewery is teasing us. Earlier today they tweeted this enigmatic photo that vaguely hints at a new series of beers from the oldest craft brewery in America. All the tweet says is that we have to wait until Monday. “We’re brewing up a special announcement for Monday, January 23. Here’s a little taste…” Can’t wait.

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Updates On The Vodka & Tampon Hoax

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You may recall my skeptical take on the Vodka and Tampon story two weeks ago. Since then, I got an e-mail from a friend with a link to a Tiny Cat Pants post In Which I Debunk the Vodka-Soaked Tampon Myth. Today, I learned from the Missus that Danielle Crittenden, Managing Editor, Blogs, for the Huffington Post Canada was as skeptical as I was. Crittenden’s also the wife of famed conservative David Frum and an author in her own right. She posted her own efforts at reproducing the vodka tampon on the Huffington Post, in an article entitled Bartender, a Dirty Martini With a Tampon!. Like Tiny Cat Pants, it didn’t go well … at all. And it’s part of mounting evidence that the people spreading this story are, for lack of a better term, full of shit. As I suspected, this sounded more like an urban legend, a hoax, a way for media outlets to scare parents. But read Crittenden’s account, it’s pretty funny, and scary, but in a whole different way.

Drunk Off … Er, In Your Ass?

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A mix of thanks and “how could you” to Stephen Beaumont for tweeting this story, because now that I know it, I can’t unknow it. According to Digital Journal, a growing trend among Phoenix, Arizona, area youths — disturbingly both girls and boys — is to get drunk by soaking a tampon in vodka and inserting it … well, you get the idea. According to the report, the practice was first identified in 1999, in the Oxford Journal of Alcohol and Alcoholism, although in that instance they wrote about just three case studies all of whom were adults in their late twenties to their mid-thirties. Also, in April of this year, the same thing was reported to be happening in Germany, too.

The latest story’s origin is a Channel 5 KPHO Phoenix TV report, where a Dr. Quan is the medical source, saying they’ll get a “[q]uicker high, they think it’s going to last longer, it’s more intense.” School Resource Officer (whatever that is) Chris Thomas adds “[w]hat we’re hearing about is teenagers utilizing tampons, soak them in vodka first before using them. It gets absorbed directly into the bloodstream. There’s no barrier, there’s no stomach acid to prevent it.” Dr. Quan agreed. “I would expect it to absorb pretty quickly as well, because it’s a very vascular structure.” Okay, that’s probably enough to give you the idea of what “butt chugging” is. Two things leap to mind.

One, this has got to be a hoax. Kids messing with adults and them falling for it hook, line and sinker. Maybe it’s just me, but when I was a kid, not only would this have never occurred to us, but even if it had, we would never have tried it. Heroin addicts shoot up between their toes to avoid detection. Same deal here, apparently, but there are just too many simpler ways to avoid detection than this. It’s just too much committed effort for most people. Or is that just me? Plus, mainstream media, and television in particular, loves a good scare story, something that puts fear into its viewers. This story is dripping with cautionary words, something else for parents to be “concerned” about. Perhaps some idiots did try it, but a growing trend? I’m just not buying it. You?

Second, if it is true, however doubtful, it shows the futility of having 21 be the minimum legal drinking age and avoiding any real education before that time. People will find a way to do almost anything if properly motivated. And few things motivate a teenager more than being told they can’t do something. I keep hearing that line from Jurassic Park in my head. “Nature will always find a way.” And so it goes.

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UPDATE: Thanks to Rick at Pacific Brew News for sending me this Tiny Cat Pants post In Which I Debunk the Vodka-Soaked Tampon Myth.

Area Code Beer

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After Anheuser-Busch InBev‘s recent acquisition of Goose Island for just under $40 million, it seems they may be taking a page from the Chicago microbrewery’s success. One of Goose Island’s most popular beers is 312 Urban Wheat Ale, named for the Chicago telephone area code.

Officially known as the Telephone Numbering Plan, it was first implemented only in large metropolitan areas in the late 1940s, and was nationwide by 1966. Until the number of area codes exploded due to fax machines, beepers (remember beepers?) and then mobile phones, many cities became closely associated with their area codes, being recognizable at once to anyone in the know. Thanks to such positive associations — not to mention being a tasty brew — Goose Island’s 312 became their best-selling beer, especially in their local market.

It appears that ABI is hoping such positive associations with local area codes will work as well in other cities as it has in Chicago. Earlier this year, in May, they applied for a federal trademark for the area codes in fourteen metropolitan areas. So far they’re seeking a trademark for 202 (Washington, D.C.), 214 (Dallas), 216 (Cleveland), 303 (Denver), 305 (Miami), 314 (St. Louis), 412 (Pittsburgh), 415 (San Francisco), 602 (Phoenix), 615 (Nashville), 619 (San Diego), 702 (Las Vegas), 704 (Charlotte), and 713 (Houston). I’m a bit surprised that both New York (212) and Philadelphia (215) are both missing from the list. Both seem more well-known to me than several on the original list. So far, there’s no information about ABI’s plans for the trademarks, whether it’s to market the Urban Wheat branded for specific markets or to do different beers in each city. But it’s certainly possible we could see some version of the beer below at some point in the future. Stay tuned.

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CBA Out Of Cash?

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Ouch, this doesn’t sound good, sad to say. The Motley Fool is reporting that the Craft Brewers Alliance is out of cash. In a post entitled Who’s Broke Now?, they indicate that the combined corporation that includes Widmer, RedHook, Kona and Goose Island “had only $13,000 in cash in its last reported numbers” and on top of that is “$19 million in debt.” I hope there’s more too it than that, because those are not good numbers. Anheuser-Busch InBev still owns 35% of CBA, but it’s unclear if they’d bail them out or even if that would be desirable.

More On The Possibility Of An ABI / SABMiller Merger

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You’ll no doubt recall the Interwebs were lit up last week with the idea of an Anheuser-Busch InBev merger with SABMiller, which was started by Credit Suisse analysts engaging in speculation. While there were some reports to the contrary, the two mega-beer companies were not in talks.

Yesterday, apparently Credit Suisse followed-up their report by saying, after fueling such a flurry of speculation, that “nobody in our diverse pool of responders indicated that we are off the mark.” They further suggest that ABI “could come knocking” on SABMiller’s door before the end of this year.

As usual, there’s more to it, such as stakes in Grupo Modelo are part of the equation. You can read more about those at Beer Business Daily, which again I heartily recommend that everyone get a subscription to Harry’s newsletter.

Rumors Of An Anheuser-Busch InBev & SABMiller Merger?

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Wow. This rumor is just mind-boggling. It makes the hairs on the back of my neck stand up. But could it be true? According to Harry Schuhmacher at Beer Business Daily, it’s not only being discussed but is considered “likely and lucrative.” Harry’s quoting analysts at Credit Suisse who believe “‘SABMiller selling to ABI would provide SAB management and shareholders an obvious and desirable exit strategy for all involved. The idea of a merger we believe could be sold to both sets of shareholders’ even though ‘this would be a large deal with many moving parts.’” Apparently there’s not much overlap between the two behemoths globally, but in the U.S. it would be more of an issue, with the two companies combining for around 80% of the domestic beer market. That, I imagine, would raise big anti-trust concerns and would loom large in the closing of the deal, which would also most likely lead to massive distributor consolidation. The price being thrown around is somewhere in the $9-10 billion range.

Obviously, there’s a lot more details to be worked out, and many of them are already addressed in the Beer Business Daily piece, which looks at pros and cons for both sides, and likely resolutions of certain issues both companies face. It’s not as far-fetched as you might think on first blush. To read the rest of it, I highly recommend a subscription to Harry’s newsletter.

When Anheuser-Busch and InBev merged, I remember someone joking that eventually there would be just one international beer company and it would just be called “Beer.” I chuckled at the time, but maybe they were on to something. Stay tuned, it’s going to be a bumpy ride.