This Bud May Be for the Belgians

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Anheuser owns half of Grupo Modelo in Mexico, and it has made an investment in China. But it has not invested in Latin America, Eastern Europe, or Africa. Under Busch IV, the company began importing some 20 of InBev's overseas brands, a relationship that helped spark the Belgian company's interest in taking over Anheuser.

CEO Busch, 44, who is being advised by Goldman-Sachs (GS) on the InBev offer, has been in the top job for only 18 months. In April, when rumors of a takeover attempt by InBev began to surface, Busch was addressing the company's distributors and said the company would not be sold "on my watch." Ex-CEO August Busch III, father of the current CEO, is also known to oppose a sale.

Brand Experiments

It's not as if Busch IV hasn't been feeling the heat even before InBev surfaced. The languishing share price last year moved him to initiate a plan earlier this year to boost revenue from the company's core brands, including more marketing spending and a 40% increase in the company's sales force. Besides lack of investment in products that attract upper-income drinkers, part of the company's problem with its core business is that it is losing more drinkers of regular Bud than it has been gaining with Bud Light. Last year, the company's sales of Bud Light were up 800,000 barrels—but sales of Budwesier were down 1.2 million barrels.

Busch IV has been the prime mover for years behind the company's often irreverent and humorous advertising, and the company's huge commitment to advertising on the Super Bowl. He also steered the company into brand extensions that have not always worked out. Before becoming CEO, he had pushed for the unsuccessful Bud Dry. He also drove Bud Ice. And Bud Select. Earlier this year, the company launched Bud Lime in an answer to Miller's successful Miller Chill extension, as well as to lure younger, upper-income beer drinkers, and women who drink Corona with lime, and who favor flavored vodkas. Early sales are promising. Anheuser is also readying a new line called Budweiser American Ale aimed at cutting into craft beer sales.

Some of the opposition to a takeover of Anheuser-Bush, the world's third-largest brewer, is emotional. It is the last U.S.-owned beer giant. Miller Brewing is owned by South Africa's SABMiller, the world's second-largest brewer. "That will gin up a lot of hand-wringing, but this is a global economy, and those considerations don't wash anymore," says Dennis Keene, an independent marketing consultant. "Nobody stopped drinking Miller when it was sold, and Wild Turkey bourbon is owned by the French."

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