Case 8 - Anheuser - Busch and the 2008 Acquisition

Case 8 - Anheuser - Busch and the 2008 Acquisition - Group...

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Group 1: Laila Elgandoz, Brittany Koshinski, Uma Mulakala, Olivia Sprecher, Allie Tate Case 7 – Anheuser- Busch and the 2008 Acquisition Bid 1. Was the $52 billion purchase too high? Explain. First and foremost, taking note of other acquisitions during this period revealed that the original offer price of $46.3 billion was far below the standard price of 12 times earnings before interest, taxes, depreciation, and amortization. With that being said, Anheuser-Busch was justified in rejecting the initial offer, which would be a reason in itself to support the $52 billion purchase price. From an analyst perspective, the acquisition price could have been a guaranteed failure for InBev being that past data has shown that those acquisitions above 10 times EBITDA usually resulted in a stock price decline for the acquirer. However, it is crucial to analyze Anheuser’s value from more than just a financial perspective to understand why the $52 billion acquisition price was reasonable and justified. Anheuser-Busch was more than just a brewing company – it was a brand that consumers recognized for more than a century. The firm was known for being a company rich with history and one with good relationships with distributors. This was something that other firms in the brewing industry lacked, which made the value of Anheuser certainly worth the purchase price. In addition, the firm had in its possession several investments that could be beneficial for InBev in reducing debt. These investments included Anheuser’s entertainment
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  • Spring '14
  • purchase price, Anheuser-Busch, InBev, Anheuser

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