Busch Tapping Buffett?
By: Alex Crippen | Executive Producer
Looks like the great American investor will have something to say about the future of the Great American Lager, with Warren Buffett reportedly involved in the hostile takeover battle between Anheuser-Busch and European brewing giant InBev.
As CNBC's David Faber reported, the battle over the future of Anheuser is expected to be contentious, on the heels of InBev's $46.3billion all-cash bid.
August Busch IV, CEO of Anheuser, is thought to be adamently opposed to letting go of the company's autonomy, going so far as exploring a possible union with Mexico's Grupo Modelo, the makers of Corona Extra. Anheuser already owns a 50% non-controlling stake in Grupo Modelo, but it's assumed that a union-in-full between the companies would make the total price tag too big for InBev. The European brewer has warned as much publicly.
Then again, there are myriad issues with Modelo and Anheuser tightening ties, notably that it assumes Grupo Modelo is willing to cede control: the very issue that Anheuser hopes to avoid.
But, where does Mr. Buffett fit into all this? Well, Berkshire Hathaway is the second largest shareholder of the brewer, owning a 5% stake.
London's Guardian, citing sources, reports that Buffett will weigh into the strategic options for the company, at the request of August Busch. On the Sunday, the paper reporting the following:
"It is understood that Buffett is concerned about Busch's suggestion in a recent statement that it could be 'several months' before the company reaches a decision about the Inbev bid, 'due to necessary corporate governance, legal and regulatory steps that must be followed'… Buffett's anticipated involvement follows concerns that a straight rejection of InBev's offer - made at $65 a share last Wednesday - might spark investor lawsuits against Anheuser's executive board for breach of fiduciary duty."
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