Hot stocks to watch this afternoon: GPRO, HAS, MU >>> READ MORE

5 Big-Name Mergers: Studs and Duds

ODP could learn from these successes ... and the failures

      View All  

Stud: InBev and Anheuser-Busch

Anheuser-Busch InBev (NYSE: BUD)In an August 2011 commentary, Matthew Dalton of the Wall Street Journal remarked:

“InBev’s $52 billion purchase of Anheuser-Busch in 2008 must rank as one of the most successful mergers in recent memory…InBev initially promised $1.5 billion in ‘merger synergies’ from the deal; it soon increased the target to $2.25 billion. The brewers second-quarter results, released Thursday, show that the target has nearly been achieved.”

Dalton goes on to say that once the fat was trimmed, its core profit growth began to dwindle. However, two years after Dalton’s article, it’s clear that InBev Anheuser-Busch (BUD) is doing just fine.

The company’s net profit in the third quarter ended September were $2.37 billion, an increase of 31% over last year. Its global sales of Budweiser increased by 8.1% in the quarter; related to cost synergies, it was able to find $250 million in annual cost savings between June and September from its purchase of Grupo Modelo, the makers of Corona. It expects to find $1 billion in cost savings by the end of 2016, and is well on its way already.

Anheuser-Busch brought one very important attribute to the merger: a real knack for marketing, which InBev’s bean counters didn’t have. If there were any doubts about the merger, this year’s Super Bowl in New York should wipe those clear from your memory. InBev Anheuser-Busch is taking over Norwegian Cruise Line’s (NCLH) newest ship, the Norwegian Getaway, turning it into a Bud Light-themed hotel.

Article printed from InvestorPlace Media,

©2017 InvestorPlace Media, LLC