Anheuser-Busch generated gross sales of $19 billion and produced over 125 million barrels of beer in 2007[1], ranking it as the largest alcohol brewer in the United States and third largest worldwide, behind Belgium-based InBev NV, and U.K. based SABMiller. While the company brews the world's two best-selling beers (Budweiser and Bud Light) and generates two-thirds of beer sales in the U.S., the company's recent growth has come from international expansion, primarily in Latin America and China. From 2003 to 2007, BUD's domestic barrel volume has been flat, while its international operations have grown an average of over 20% annually including a 13.4% increase in 2007. In June 2008, Belgium/Brazil based InBev made a $46.3B offer to acquired Anheuser-Busch. A combination of these two titans would produce the world's undisputed king of breweries with InBev's focus on Latin America, Canada and Europe complementing Anheuser-Busch dominance in the stagnant U.S. market and Mexico. Indeed, the new entity would combine the largest U.S. brewer with the largest international brewer by volume resulting in aggregate production of over 300 million barrels. In July 2008, the last American brewer agreed to by acquired by inBev for $70 a share or about $52B.
Anheuser-Busch faces particular operational challenges stemming from industry consolidation as well as price increases of key commodity inputs.
The world's major breweries--including Anheuser-Busch, InBev, SABMiller (SBMRY), and Molson Coors (TAP)--have grown through the acquisition of and partnerships with smaller breweries rather than organic growth. The successful integration of many disparate operations catering to different consumers and cultures will be crucial to the success of international growth. Anheuser ...