20% premium makes a great sell...
For AB’s shareholders, there could be no better news. With the combined entity expected to earn $36.4 billion in revenues and control more than 50% of the US beer market, expected cost synergies of around $1.5 billion by 2011 too don’t look too faint a mirage.
Juli Niemann, CFA, Smith, Moore & Co., also explains, “Synergies are there as the duo would create an excellent end-on-end brewing, distributing & marketing powerhouse worldwide.” However, InBev should not do away with the theme parks that AB owns (which clocked revenues of $1.3 billion, 7% of AB’s total revenue in 2007) in the name of cost-cutting. Having become a global power now, the combined entity should also not get complacent on the marketing front as Ann Gilpin Analyst, Morningstar asserts, “If InBev cuts on advertising or marketing it will pay the consequences...” Amongst this hullabaloo, there is SAB Miller which has now been dethroned from the numero uno spot in the beer-making business; and it won’t be long before we hear of a SAB Miller bid for... errr.... watch out for this space!
For AB’s shareholders, there could be no better news. With the combined entity expected to earn $36.4 billion in revenues and control more than 50% of the US beer market, expected cost synergies of around $1.5 billion by 2011 too don’t look too faint a mirage.
Juli Niemann, CFA, Smith, Moore & Co., also explains, “Synergies are there as the duo would create an excellent end-on-end brewing, distributing & marketing powerhouse worldwide.” However, InBev should not do away with the theme parks that AB owns (which clocked revenues of $1.3 billion, 7% of AB’s total revenue in 2007) in the name of cost-cutting. Having become a global power now, the combined entity should also not get complacent on the marketing front as Ann Gilpin Analyst, Morningstar asserts, “If InBev cuts on advertising or marketing it will pay the consequences...” Amongst this hullabaloo, there is SAB Miller which has now been dethroned from the numero uno spot in the beer-making business; and it won’t be long before we hear of a SAB Miller bid for... errr.... watch out for this space!
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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