Overnight, Belgian newspaper De Standaard wrote that, based on its sources, Warren Buffett backs an InBev buy-out of Anheuser-Busch (NYSE: BUD).
Is it any wonder? BUD can try to greatly improve its earnings on its own, but with 50% of the US beer market, that may be hard. It can hope that buying the piece of Mexican brewer Grupo Modelo that it does not already own will help profits. More likely it will increase debt or dilute current shareholders.
BUD's problem is that its shares may never see $60 again. They have risen above that on the InBev offer. A look at the company's long-term shock chart shows it has never been this high before.
If Buffett makes his backing of the InBev offer public, most of the BUD investors are likely to follow. He will have done all of them a favor.
Douglas A. McIntyre is an editor at 247wallst.com.
Reader Comments (Page 1 of 1)
6-19-2008 @ 1:31PM
Disappointed Dolfan said...
You sir, Douglas McIntyre, are UNBELIEVABLE! AB is the last major AMERICAN brewery in the U.S. If the deal were to go through, which it will not, InBev would outsource, cut jobs, move breweries, all at the expense of American workers. For the short term this may good, but in the long term it would make our economic situation worst! Also, their have been rumors coming from certain insiders that AB will buy the rest of the Mondelo group, which would make AB too big to buy. I hope you feel good about yourself sir, because people like you are the reason are economy is in this situation.