InBev announced yesterday their intention to set up a management office in New York City in order to “better support the needs of the combined global organization. This office would have an operational focus supporting the business in the
implementation of the Company’s strategy under the direction of the Global Headquarters and center of strategic decision making in Leuven” [Belgium].
There’s nothing at all about this at the new AB-InBev website, which though it claims will be “developed over the coming weeks” is still wallpaper several months later. I guess communicating with investors and the public is near the bottom of the priorities list. Breaking the bad news is left to the Anheuser-Busch team which is, at least for time being, still in St. Louis.
More from the Press Release:
The creation of AnheuserBusch InBev will generate significant growth opportunities from leveraging the company’s combined brand portfolio, including its global flagship brands Budweiser, Stella Artois and Beck’s, its leading global distribution network and by applying best practices across the new organization. In addition, over 40% of the newly combined company’s earnings are now generated in the United States, which has become the company’s largest market.
The establishment of an office in New York would enable management to better support the realization of these opportunities and day-to-day management of the business. The office would host functional management heads together with members of their marketing, finance, people, supply and legal teams.
There’s no mention whatsoever of St. Louis in the press release itself, though in the AP Story they’re reporting that “St. Louis, where Anheuser-Busch was founded, will remain the head office for its North American operations.” But InBev had emphatically promised that St. Louis would remain HQ for AB-InBev in the New World, so it seems odd they wouldn’t address those concerns in the press release and leave it to reporters to suss out.
The spin is that St. Louis will remain U.S. HQ for the Anheuser-Busch brands but that New York will be an office for all the InBev brands. Apparently InBev will layoff as many as 89 Belgian workers and Carlos Brito (InBev CEO) and their CFO will split time between the New York and Belgium offices. The Belgian office will become HQ for Western Europe, St. Louis will be HQ for North America with the New York office hosting “management heads and employees in marketing, finance, supply and legal.” But InBev will continue to host shareholder meetings and most Board meetings, too, in Belgium. That sure seems confusing as to where the hierarchy will lie between Belgium, New York and St. Louis. And it sure seems like an end run around their promise to St. Louis. Since this move is being sold as a cost-cutting measure, how inconceivable is it that this is also laying the groundwork to say in the future that some or all of the functions in St. Louis will move to New York to cut even more costs? Sure sounds plausible to me.