Anheuser-Busch Fights for Time

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Specifically, the suit charges that InBev used "materially misleading" statements intended to convince investors and others that it had obtained commitments for more than $40 billion in financing, "when in fact it had no firm commitment from any bank." The suit went on: "Given the state of the credit markets today, no group of financial institutions would unconditionally commit $40 billion to a borrower to pursue a hostile acquisition."

InBev has not responded yet to the lawsuit.

It's About the Brand

Outside the courtroom, Anheuser-Busch is trying to plant the idea that its vaunted Bud brand would be damaged if it agreed to a deal with InBev and then InBev had to drop the bid because funds don't materialize. The suit states: "Any commitment letters InBev has received are certainly laden with conditions leaving the proposed financing banks free to walk away in any number of circumstances." Anheuser-Busch is also trying to convey the idea that InBev will be too highly leveraged to run the combined company effectively after a deal is consummated.

The Washington card may be harder for Anheuser-Busch to play. Congress usually reserves its involvement in corporate mergers and takeovers in areas that could impact national security. But in this case, some members have shown keen interest in the potential loss of ownership of an American icon (BusinessWeek.com, 7/9/08) like Budweiser. With national unemployment at 5.5% as of June and with free-trade agreements a hot-button issue in the Presidential election, any deal that could possibly result in a loss of jobs is going to be targeted by members of Congress. InBev's Brito has already met with Senator Claire McCaskill (D-Mo.) and other members of the Missouri congressional delegation.

Anheuser-Busch has several Washington lobbying firms working the political machinery. They include the Gephardt Group, led by Dick Gephardt, ex-Democratic House leader who formerly represented a St. Louis-based congressional district; Public Strategies Washington, which includes former White House press secretary Michael McCurry; Timmons, the city's oldest lobbying firm; and Akin Gump Strauss Hauer & Feld, Washington's second-largest lobbying law firm.

Missouri politicians hardly need prodding to resist a loss of local control over the biggest corporate name in St. Louis. Matt Blunt, governor of Missouri, has made a bipartisan plea for a U.S. antitrust review to block the sale.

However, it may be hard to justify blocking a takeover on antitrust grounds. With brands like Stella Artois, Bass, and Becks, InBev doesn't hold enough of the U.S. beer market to present a legitimate threat to competition. And there is nothing new about foreign ownership of consumer goods companies—several other iconic American brands have been bought and sold without much hand-wringing from Congress. Miller Brewing is already foreign-owned. Wild Turkey Bourbon is owned by French wine and spirits company Pernod Ricard. Chrysler was bought by German automaker Daimler-Benz, which holds a minority ownership now that the Detroit automaker has been sold again to Cerberus.

Angry Shareholders

With both General Motors (GM) and Ford (F) struggling financially in a recession of indeterminate length, it's not inconceivable that one or both of those giants may eventually need some form of bailout from Toyota TM or Renault-Nissan to stay above water.

Even if Anheuser-Busch is successful in fending off InBev, it will have a crew of angry shareholders to deal with. Anheuser-Busch stock, now trading above $60, could easily fall back to $50 or below, where it was before the takeover interest surfaced. The company has put forth a restructuring plan that calls for raising beer prices, and, say Wall Street analysts, will likely be expanded to try and sell its theme park and packaging divisions. "But that doesn't get you back to $65 a share," says Bryant University's Roberto.

If all else fails, would the Busch Family and its financial advisers, Goldman Sachs GS, test the private equity waters? It's possible; even though capital markets are tight these days, deals such as the $52 billion private-equity buyout of Canada's BCE (BCE) are still going forward.

The likely outcome for Anheuser-Busch in any case seems to be a change in ownership. But the Busch family is acting to make sure it happens on its terms and at its price.

Editor's note: An earlier version of this story credited the four corners defense to John Wooden

Kiley is a senior correspondent in BusinessWeek's Detroit bureau.