Possible Sale of Anheuser-Busch Has St. Louis In An Uproar Over Loss of Tradition and Jobs

     ST. LOUIS (CN) – Anheuser-Busch is a major force in St. Louis, and the city is wondering what effect the proposed sale of the company may have not only on its 6,000 local workers, but on the millions of dollars the beer giant contributes to charities every year. Anheuser-Busch’s Clydesdales trotting around Busch Stadium on opening day each year are a tradition for Cardinals fans. But Anheuser-Busch’s future is in doubt after Brazilian-owned, Belgium-Based InBev made a $47 billion offer to buy the company.




     Four lawsuits already have been filed over the proposed buyout. Three claim Anheuser-Busch breached its fiduciary duty to shareholders by not accepting InBev’s offer. The fourth seeks an injunction prohibiting the sale, claiming InBev has not offered enough money.
     August Busch III and August Busch IV oppose the proposal, but the decision is out of their hands, as the Busch family holds just 4 percent of Anheuser-Busch stock. How the shareholders will vote is not clear.
     Anheuser-Busch is not just the King of Beers; it is the king in St. Louis. The brewery’s value to the community cannot be quantified by its 6,000 workers, or the 52 percent of the U.S. beer market it controls. Anheuser-Busch also gives millions annually to charities and is a major sponsor of every major sports league in the United States.
     ‘Show Me’ You’ll Stay
     Some St Louis residents say they are concerned about InBev’s history. The Belgian beer giant has a reputation of streamlining the operations of breweries it acquires, a concept that foreign to Anheuser-Busch. After InBev bought Labatt in Canada, Labatt’s Toronto brewery was closed.
     SaveAB.com co-founder Ed Martin said Anheuser-Busch has plenty of fat to cut at the expense of St. Louis.
     “If InBev buys Anheuser-Busch, you’re going to have a company with $60 billion in debt,” Martin said. “To service that debt, they will have to cut costs because they can’t really increase Anheuser-Busch’s 52 percent market share in America.”
     InBev has promised to keep its North American headquarters in St. Louis and not to close any breweries.
     “We understand St. Louis and the community ties that Anheuser-Busch has to the local people and institutions,” said InBev CEO Carlos Brito. “It is a very important pillar in the company’s history and it has been a building effort that has gone on through generations and we intend to keep all of that going.”
     But that promise isn’t good enough for St. Louis Mayor Francis Slay, Gov. Matt Blunt and Sens. Kit Bond and Claire McCaskill, who have condemned the deal. McCaskill said she told Brito that “Missouri doesn’t want you” to buy Anheuser-Busch.
     St. Louis has been on the losing end of buyouts in the recent past.
     American Airlines bought out Trans World Airlines in 2001. American’s hub in Chicago made TWA’s hub in St. Louis unnecessary. American cut jobs and replaced St. Louis’ mainline hub with regional jet service, reducing more than 800 daily flights to less than 300.
     Federated Department Stores bought May Department Stores in 2005. More jobs and another St. Louis-based company were lost.
     After these experiences, residents of the Show-Me state are a bit uneasy about buyouts.
     Trickle-Down Effect
     Anheuser-Busch employees wouldn’t be the only ones affected. Hundreds of consultants could also lose their jobs.
     An executive in information technology consulting said the brewery is a major source of business for St. Louis area consulting firms, constituting from 10 to 70 percent of various firms’ business.
     Anheuser-Busch is “the premier contracting company in St. Louis,” the executive said. “They have long-term contracts, a good line of communication for our people, and they use cutting-edge technology.”
     Debra King, owner of Pooh’s Corner bar in south St. Louis, said several brewery workers are regular customers. She doesn’t expect much to change with the beer or prices, but King is afraid that Anheuser-Busch’s personal service will go away.
     “We have annual parties and Anheuser-Busch will give us free T-shirts to use as give-a-ways,” King said. “I think that kind of stuff will go away. The place that would take it over will be so huge that they won’t care about us.”
     Long Charitable History
     In the past decade, Anheuser-Busch has given more than $370 million to nonprofit organizations. In 2007, Anheuser-Busch donated from $15,000 to more than $1 million to more than 200 organizations.
     “The biggest danger is losing the philanthropic efforts of A-B,” said Ed Belter, a former treasurer for Metropolis, a group dedicated to promoting the growth of St. Louis City. “If you go back 100 years, with almost every major project that has taken place, A-B heads the donation list.”
     Martin said Anheuser-Busch’s generosity is a trademark.
     “Look at any philanthropic effort, whether it is the March of Dimes or the Boy Scouts, and someone in A-B is involved,” Martin said.
     But Brito said InBev understands the depth of Anheuser-Busch’s community generosity.
     “I think what Anheuser-Busch has done with its local community ties and philanthropic donations were an integral part of their community involvement and development of their company and the build of their brand. We understand and will continue to support those efforts.”
     Focus On Sports
     Anheuser-Busch is a major player in entertainment, especially sports. It is a major sponsor of the Cardinals, Blues and Rams and is a major sponsor of Major League Baseball, the NHL, NFL and the NBA. continued

     

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