USA: Anheuser-Busch denies merger speculations

Anheuser-Busch Cos., the world's largest brewer, has "significant geographic" risk and needs to expand into more overseas markets, Chief Executive Officer August Busch IV said Monday, according to Bloomberg News, February 27.

Busch was speaking at a conference in Scottsdale organized by industry journal Beer Business Daily. He declined to comment on a report last week by Brazil's Valor Economico newspaper that InBev NV, the world's third-largest brewer by sales, held "preliminary" talks with Anheuser-Busch about a possible merger.

"We need to, in the years ahead, diversify our global footprint in order to not have all our eggs in one basket," Busch said in response to questions. "We can't open up our investors to the geographic concentration risk if something were to go wrong in the U.S. marketplace."

Anheuser-Busch has struggled in recent years to lift demand in the United States, where it gets two-thirds of total volume, as some consumers cut back on domestic beer in favor of spirits, wine and imports. The company's domestic volume growth slowed to 1.2 percent last year, reversing a 1.8 percent drop the prior year.

Shares of Anheuser-Busch, based in St. Louis, fell 24 cents to $49.81 at 4:17 p.m. in New York Stock Exchange composite trading. They climbed 15 percent last year.

Busch said he's interested in additional partnerships or acquisitions such as the recent agreement to import InBev's European brands including Beck's and Bass to the United States and last year's purchase of Rolling Rock beer. No new deals are imminent, he said.

"Our plate is pretty full right now," Busch said. "We're trying to ensure for our system that we don't lose focus on our core brands."

If Anheuser were to merge with InBev, the combined brewer would control about 25 percent of the global beer market with No. 1 positions in the U.S., Brazil, Germany and China, according to Bear Stearns & Co. analyst Carlos Laboy.