A deal at $70 per share is an about-face for both sides, said Morningstar analyst Ann Gilpin, noting that Anheuser Chief Executive August Busch IV had said he wouldn't sell the company and InBev CEO Carlos Brito said he wouldn't go higher.
"It's better that they reached a friendly deal than going hostile. That can make integration a complete nightmare," Gilpin said. "Anheuser-Busch knows the U.S. market a lot better than InBev, so InBev needs to retain key management from Anheuser for marketing and distribution."
To Gilpin, Anheuser shares are only worth $57 on a stand-alone basis, but she said $70 was a fair price to pay, since InBev would be able to cut costs and sell Budweiser and Bud Light -- the world's two top-selling beers -- overseas.
"The management team at InBev doesn't think about the future in terms of quarters and years. They look at it in decades. They're thinking about this investment for the next century," Gilpin said.
The companies said the deal would create benefits through revenue enhancement and cost savings. The combination will yield cost synergies of at least $1.5 billion annually by 2011 phased in equally over three years, the companies said.
The transaction is expected to be neutral to normalized earnings per-share in 2009 and boost earnings beginning in 2010, the companies said.
Adding another dimension to any deal was Mexico's No. 1 brewer Grupo Modelo, which is 50 percent owned by Anheuser. Modelo, which does not have the power to veto an Anheuser takeover, said it was in talks with InBev on how both companies could work together.
"It is truly a win/win," situation, said Tom Pirko, president of beverage industry consulting firm Bevmark. "Both got precisely what they wanted."
Anheuser, whose shares have stagnated for five years as it failed to expand internationally like its rivals, will get a shot in the arm, its shareholders will get a handsome premium, and InBev will become the world's No. 1 brewer by volume, Pirko said, beating out London's SABMiller for the top spot.
Anheuser-Busch's independence dates back roughly 150 years to the Bavarian Brewery in St. Louis, which Eberhard Anheuser bought in 1860. Several years later his son-in-law Adolphus Busch took over, starting the Busch family's reign, which was interrupted only once, when Patrick Stokes served as CEO from 2002 to 2006. Stokes is currently chairman of the board.