Where will the Brazilian bankers running brewer Inbev NV go on their next bender? Fresh from their debt-financed conquest of Anheuser-Busch Inc., it might appear too soon to contemplate such a question. But boss Carlos Brito and his board show such a voracious appetite for deals they seem unlikely to be sated for long.
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And there’s not much of size left in beer land. There’s the rest of Grupo Modelo SA de CV in Mexico. But that’s small beer compared with the $52 billion (Rs2.18 trillion) takeover of the American brewer of Budweiser. To keep its deal machine humming, Inbev may need to look behind the bar and on the liquor shelf—where Diageo Plc. stakes its ground.
Inbev’s speed and stealth in nabbing Bud surprised the entire booze industry, and has given the impression that the Leuven, Belgium-based concern will go after anything not latched down by family control or antitrust problems. Diageo, which brews Guinness along with distillations such as Smirnoff and Johnnie Walker, offers neither obstacle.
The UK-based group has a $44 billion market value, a big free float and no poison pill. Its primary business is premium spirits so there’s no product overlap, but there is scope for synergies in distribution.
It is likely, however, to take Inbev’s dealmakers a couple years to digest the $45 billion in debt they took on to slurp up Bud. That should gives Diageo time to make a pre-emptive move. Yet there’s only one beer group with the scale and a premium global brand that might prove alluring—Heineken NV.
The trouble is that Heineken is controlled by a holding company overseen by Charlene de Carvalho, the late Freddy Heineken’s daughter. In a sale to Diageo, the family would lose control, unless Diageo offered some sort of crafty cross-shareholding structure.
Still, if there’s anything Busch family members’ struggle to keep Anheuser independent shows, it is that long-held assumptions about family fortresses can crumble rapidly.
A Diageo-Heineken deal would leave Inbev thirsty—indeed, so parched it might even consider gulping down a Pepsi or a Coke.