What were the financial implications (capital structure, financial flexibility) of the deal for the acquirer?

CaseStudy: The 2008 Anheuser-Busch Inbev Deal
Abstract
In June 2008, Inbev made an unsolicited USD50 billion offer to acquire Anheuser-Busch (AB). The offer was rejected by AB’s board. Inbev’s plans were driven by a general trend of industry consolidation, the declining beer consumption in traditional markets, and the superb geographic fit between both firms. AB fought back and announced its restructuring plans. Law suits were initiated and political issues surfaced as well. Inbev decided to raise its bid and could eventually acquire the target. The acquisition of the US’
most important beer producer by Belgian-Brazilian Inbev offers a comprehensive picture and excellent description of the numerous facets, challenges and issues mergers and acquisitions (M&A) bring along.
Case length: 27 pp (10 pp case description, 17 pp exhibits)
Questions/discussion points
1. What, in your analysis, was (were) the main motive(s) for the takeover from the acquirer’s (i.e. Inbev’s) point of view?
2. What was (were) the main rationale(s) for resisting the takeover on the part of the target (i.e. Anheuser-Busch)? What takeover defenses were used, and was the bid really hostile (why/why not)?
3. In your analysis, what were the main governance/control issues and potential conflicts of interest
• in the target firm prior to the takeover?
• in the merged firm post-takeover?
4. What were the financial implications (capital structure, financial flexibility) of the deal for the acquirer?
5. Timing-wise, was Inbev right to push the deal through, despite the adverse market conditions? Could the deal have been postponed?
6. Would it have been a viable alternative for Anheuser-Busch to remain independent?