Wednesday, July 9, 2008

The Clydesdales Hire Lawyers

Anheuser-Busch has filed a lawsuit (as of Monday) in the federal district court in St Louis. MO seeking to preserve its independence from the Eurolopers at InBev.

One unusual twist is thatA-B wants to use the US embargo of Cuba as a justification for keeping InBev away. The euros have substantial operations in Cuba, and of course AB isn't allowed to transact business there. Ths, even if the two companies are formally merged they'd have to remain operationally distinct.

To make this a subject for a lawsuit, rather than simpky a "don't sell" pitch to shareholders, A-B has to say that this is material information that InBev is hiding in its efforts to acquire control of A-B at a price that doesn't match the economic realities of the situation.

That is, accordingly, what the complaint does.

InBen "claims it will make St. Louis the North American headquarters for the combined company, a promise it has repeated on numerous occasions since making its unsolicited acquisition offer...."

InBev's North American operations include its Cuban business. So InBev is being less-than-honest with the above cited promise.

An obvious riposts suggests itself. Surely, when the company is combined, the Cuban operations can be shifted (geography notwithstanding) to the European HQ of the resulting behemoth. The bulk of the North American operations would be, roughly, what A-B is now. That was the point of the promise, wasn't it? Not "we'll give you Missourians control of our N.A. operations" but "we'll let you keep control of yours."

Anyway, everything is given a national-security angle nowadays, and we can expect to see more of this.

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