Anheuser takeover hits hard in its U.S. home city

REUTERS
Reuters North American News Service

Jul 14, 2008 15:40 EDT

ST. LOUIS, Mo. (Reuters) - Outrage mixed with sad resignation Monday in the home city of brewer Anheuser-Busch Cos Inc, following its $52 billion takeover by Belgium-based InBev NV.

The 150-year-old Anheuser, brewer of Budweiser and 30 other brands, has served as a symbol for St. Louis almost as recognizable as the soaring Gateway Arch.

"Budweiser and St. Louis will remain linked by the thousand bonds that history, bricks, preferences and generations of brewery families can forge," said Mayor Francis Slay.

Slay, like several members of Congress representing the area, had objected to the deal when it was proposed a month ago, but said they planned to do whatever they could to preserve the company's 6,000 local jobs and millions of dollars in charitable donations.

Anheuser-Busch handed out $10 million in charitable gifts in 2006, many to colleges and universities, and spends another $300 million each year to sponsor sports, the arts and other events.

"I'm disappointed," U.S. Senator Claire McCaskill, a Democrat from Missouri, said in a statement.

InBev has suggested it will exploit synergies between the two brewing giants to cut costs, but has proposed keeping the combined brewer's U.S. headquarters in St. Louis, along with the huge brewery on Pestalozzi Street, one of Anheuser's 12 U.S. breweries.

"Beer is basically cheap and heavy. That's why Anheuser's breweries are spread around the country. To sell it in the Midwest you basically have to make it here," said Glenn MacDonald, an economics professor at Washington University in St. Louis.

"I don't think there will be a significant loss of production jobs. One thing they've said is they'll leave management of the U.S. business in St. Louis -- we'll see whether they're going to do that."

MacDonald said Anheuser has a reputation for having a large contingent of middle managers that might face buyouts or cuts by the new owners.

Asked whether the deal is a good one, Missouri Republican Sen. Kit Bond, who had vigorously opposed it and asked federal regulators for strict oversight, said: "Ask me in three years."

Talk in some taverns turned to grim acceptance of the global economic forces driving the deal, while others opted to express their disgust by switching away from Anheuser brands.

"Why isn't something being done about American companies being gobbled up by foreign interests?" wrote Michael Anderson in an on-line message to the St. Louis Post-Dispatch newspaper. "St. Louis is about to become the next Detroit."

The St. Louis area has more than 3 million people and earlier buyouts have led to the loss of the headquarters of companies such as aircraft maker McDonnell Douglas and broker A.G. Edwards. (Reporting by Andrew Stern and Michael Conlon in Chicago and Diane Bartz in Washington; Editing by Michael Conlon and Andre Grenon)

Source: Reuters North American News Service