‘Dethroning the King’ Displays M&A’s Intricate Web — Summer Reading

by Kyle Woodley | June 28, 2013 10:30 am

Editor’s note: We’re pleased to be rolling out a summer series on investing books. Each week we’ll be reviewing two books — one classic, one a bit newer. Our editors and contributors will offer their perspective on some popular titles. We hope you find some inspiration.

[1]The intrigue from literature about well-known historic events is never about the “what,” but the sordid details outlining “how” and “why.”

In that and other ways, my time poring over Dethroning the King — detailing InBev‘s 2008 acquisition of Anheuser-Busch — felt much like reading about the Titanic.

Dethroning documents the capitulation of an American icon via Wall Street’s greatest all-cash deal during one of the nation’s worst financial crises. In so doing, it also paints generations’ worth of backdrop, helping even those entirely unfamiliar with the events feel a close connection (albeit appropriately strained) with the privileged yet tortured Busch family.

The company’s two-generational head unsuccessfully fought off the unlikeliest of suitors: the Brazilian businessmen of Brahma — a brewer that Anheuser once had the chance to head off but didn’t, and which was allowed to grow through mergers to eventually become InBev.

Author Julie MacIntosh, a former Financial Times U.S. mergers and acquisitions correspondent, delved upon her experiences covering the takeover, giving the book a thoroughly journalistic feel. MacIntosh leans on detailed facts and quotes for imagery, forming a complete mold of both the major players and the M&A theater as it evolved.

And in a way, that’s what made the Anheuser-InBev dealings that much more intriguing — no one had to “sell” the story, so to speak. The story, laid out not dryly, but not extravagantly either, sold itself as it told itself.

It’s through this lens that we develop a relationship with the Busch family, a line of boy-kings born into fantastic wealth and responsibility whose material riches are put into stark contrast with their emotional poverty. Fathers and sons aren’t just family; they’re bitter foes on the corporate ladder. It was difficult not to take an occasional emotional double-take, as I found myself pitying characters who pages ago were traipsing through the Lake of the Ozarks or piloting the family plane, always stocked with Budweiser (but never food).

When asked by a co-worker what I took from Dethroning, I made a glib remark about it providing two things: new, depressing market lessons, and reiterations of depressing market lessons I’d already learned.

Of course, that’s the abbreviated version, but outside of the pleasure of merely reading an engaging, complex story, it’s true.

Office politics and interpersonal relationships earned much more credit for Wall Street’s greatest all-cash acquisition than I’d ever have imagined possible — and apparently than InBev ever realized. Months’ worth of number-crunching, scheming and positioning paled in comparison to the years of self-undermining accomplished by August III and his terrified minions.

However, the goings-on confirm what we all should know: M&A is a grueling affair, and one with more twists and turns than you and I can predict.

While many correctly assumed InBev would eventually gobble up Anheuser-Busch, how many didn’t? How many cashed out early, never realizing the full price InBev eventually bid? How many gambled on a potential Grupo Modelo deal? Joe Investor has little clue to what’s going on, and our news is on one heck of a tape delay — if you think you’re making an educated guess, you’re sorely mistaken.

It also confirmed that humans are driven by greed. Stunner there, right?

Dethroning serves not just the investing community, but many other audiences. Consider it educational material for the professions that took center stage in the book: established or aspiring brewers, bankers, even executives.

It also would provide a historical backdrop to anyone who has lived or currently resides in St. Louis. And given the book’s quick pace and readability — as well as Anheuser-Busch’s cultural importance — I’d suggest Dethroning to anyone looking to broaden their knowledge of American history.

Kyle Woodley[2] is the Deputy Managing Editor of InvestorPlace.com[3]. Follow him on Twitter at @IPKyleWoodley[4].

Source URL: https://investorplace.com/2013/06/dethroning-the-king-displays-mas-intricate-web-summer-reading/

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