Anheuser Busch, the makers of Budweiser, will reject InBev's generous buyout offer while announcing a plan to overhaul the company to cut costs. The cat and mouse game isn't over yet though.

But for now it appears as if all the St. Louis/ American brand/family business/hometown operation talk put enough pressure on the brewers to reject the $46.6 billion offer from the Belgian/Brazilian makers of Beck's and Stella Artois.

However, this isn't really the big victory many were hoping for. It looks like Anheuser is going to take some hits in order to stay the all-American beer company. One of these hits, unfortunately, will lead to the very job losses the company was trying to avoid by rejecting the buyout.

Andrew Ross Sorkin, the dealmeister from The New York Times, explains the details in an article today:

In an effort to justify rejecting InBev’s $65-a-share bid, Anheuser-Busch is expected to announce an extensive reorganization aimed at bolstering profits that will include cutting more than $500 million in costs, these people said.

The savings will come from reducing marketing expenses and possibly shedding assets like its Busch Gardens theme park business and its packaging unit. The reorganization, which is expected to include scores of job cuts, may anger some residents and politicians in St. Louis, where the company’s headquarters is located, who had been pressing Anheuser-Busch to reject the bid in part to save local jobs.

Oh no, selling Busch Gardens?! What a shame. But none of that looks like it will ultimately stop InBev from sealing the deal. This rejection is expected to force the company's hand into a hostile takeover scenario.

InBev will speak directly to the shareholders of A-B to show how the company would be foolish not to accept such a generous offer. This is the time when all the promises to keep it a St. Louis-based American brand will come out, along with:

1.) "We'll make Budweiser the flagship brand for the merged companies."
2.) "We'll keep the Anheuser-Busch name and the families will still be involved."
3.) "We promise not to do something Eurotrashy and gay with the bottle designs."
4.) "We won't relabel Budweiser as 'piss flavored'."

In spite of all the $500 million of cost-cutting measures, and Busch Gardens sell-offs, A-B's last chance to stay independent may be to complete the full purchase Grupo Modelo (makers of Corona), of which it already owns 50%. It's weird how one of the only ways to save a well-known American brand from being bought out is for it to buyout a well-known Mexican brand.

But even that purchase will be tough, because Grupo Modelo indicated it was unlikely to sell to A-B, but is engaging in direct talks with InBev. Epic Burn! So it seems that in spite of the relatively 'good news' that A-B said 'f- off' to InBev, it may all be short-lived because they aren't out of the woods yet.

NYT: Anheuser To Reject InBev Offer, June 26, 2008

Previously-
WallStreetFighter: How Can the Budweiser Brand Turn Down This Deal?, June 12, 2008

Two of the country's major airlines are taking one step closer to finalizing that merger they couldn't complete this spring. Who doesn't like second chances? But will it help passengers get cheaper plane tickets?

Continental and United Airlines will join in an 'unholy' alliance to share rewards, discount codes, customers, and frequent-flier points. It's not a merger yet, but just a plan for the two to work together in these slim-margin, high-fuel cost days.

This announcement basically puts an end to those other ongoing talks Continental had with American Airlines and British Airways. Ouch, burn!

A USA Today article has all the juicy, soap-opera-like merger betrayals:

American, a unit of AMR, and British Airways tried to lure Continental to its team, called oneworld. But a three-way deal grew less likely as Continental resumed its flirtation with United. Earlier this year, Continental and United were in advanced talks to become a single carrier.

But Continental walked away from the deal after UAL reported a huge loss for the first quarter. Continental Chief Executive Lawrence Kellner said the Houston-based carrier preferred to remain independent.

This Continental/United alliance will help reduce fuel costs for both the airlines and will assist with selling one another's flights. However, still yet to be seen: airlines passing on those cost reductions to their passengers.

Meanwhile, airlines are doing everything in their power to squeeze pennies out of in-flight snacks and checked luggage. Happy flying!

USA Today: Continental, United Join Alliance, June 19, 2008

Anheuser-Busch, the largest brewing company in the United States and the makers of Budweiser, has been given a very generous buyout offer from InBev, the Brazilian-Belgian company that makes Stella Artois and Beck's.

Is this the end of Anheuser-Busch as a top American brand? Will they replace the eagle with some sort of Brazilian frog or Belgian ferret?

The offer is for $46.4 billion, equal to about $65 per share - that's worth 14% more than the stock is currently trading for. Additionally, InBev claims most of the current trading is speculation on the deal, so their offer is actually 35% more than the Anheuser-Busch stock is worth.

This deal has been kicking around for a while and late last month we wrote about some worrisome statements from InBev about their 'global drinks industry consolidation end game.' However, now this deal looks very real and a genuine offer is right on the table. Most analysts are saying it would be stupid for the Bud dudes to not take the deal. According to an article from Portfolio today:

Indeed, there is a compelling logic in the combination of the home of Budweiser and the brewer of Stella Artois and Beck's. There is little geographical overlap, with Anheuser-Busch dominating the United States and InBev leading in Europe and South America. Beer sales in Europe and North America have been sluggish in recent years; the real growth has been in Asia and Latin America.

And with commodity costs rising, from barley and hops to aluminum for cans, it makes sense to have even greater scale for increased buying power and distribution heft.

But what about Anheuser-Busch as an American brand? It has been run by the Anheuser and Busch families for over 150 years. It is a hallmark and an institution in the city of St. Louis and the governor of Missouri has publicly said he is troubled by the news of their purchase.

Who can argue with InBev wanting to take over a company that has 48% of the American beer marketshare. That's right, 48% of all beers purchased in the US are A-B products. Surprising, right?

Even myself, a New Jersey resident and a frequent traveler on the famed and hated NJ Turnpike, recognizes the large blazing and swirling A-B sign that has become a landmark of Newark, NJ. Of course all of these things will probably not change. It may just be a foreign owned beer monopoly in business practices, but are we losing a major American brand in the process?

Check out the InBev CEO's pandering to Bud drinkers about the deal in this video interview.

Let us know in the comments section if you think this deal should happen. And, as always, this Bud's for you.

MarketWatch: Market Cheers InBev Bid, June 12, 2008

Portfolio: Brewing Bid Battle, June 12, 2008

Verizon announced today that it had finalized its $28.1 billion purchase of Alltel wireless.

Prior to the purchase, AT&T was the largest wireless network in the United States, with 71 million subscribers. Verizon, the second largest, with 67 million subscribers. However, now after adding Alltel's 13 million subscribers, Verizon is the new king with 80 million.

It's not just sheer numbers that work out in Verizon's favor either. Alltel's subscription base is more spread out geographically throughout the entire country. They span mostly smaller cities and rural areas in 34 states. They are the ones who you 'roam' with when your normal provider (AT&T, Sprint, or Verizon) doesn't have service in the areas you are traveling. That won't be a problem for Verizon subscribers anymore.

Verizon stock has been climbing all morning, and many analysts have it marked as a definite 'Buy'. This is big news for, Verizon, a company which has been struggling against the AT&T/Cingular merger and AT&T iPhone exclusive contract for a while now.

But what about those Alltel ads with the big 4's 'Sales Guys'/Nerd Patrol? After taking a closer look at those ads, this merger looked like destiny (videos after the jump):

Alltel's Holiday ad. Even Santa likes Alltel better!

Alltel Holiday Ad - Watch more free videos

Here's another Alltel ad. This one might explain the dynamics of the group better, and also gives a little foreshadowing of the Verizon deal...

Alltel My Circle Commerical - Watch more free videos

As we've reported before, the Sprint guy is clearly the dumbest. Alltel must have some bad blood with them, I guess. But illustrated in this ad, the red-haired Verizon dude is the most tolerable of the 4 characters. The always scheming Orange AT&T is just pure evil, and the Pink T-Mobile guy just looks like a lame version of Alltel's godly 'Chad' with more dumb jokes.

But what will future Verizon/Alltel commercials look like?
My suggestion: the Sprint/T-Mobile/AT&T nerds awkwardly walk in on Chad and a new, sexy, and attractive female version of the Verizon guy going at it. "Come and Get Your Love!"

(via blog.cleveland.com)

Bloomberg: Verizon Wireless To Purchase Alltel For $28.1 Billion, June 5, 2008

CNBC: Verizon Buys Alltel, June 5, 2008

FedEx announced it will be getting rid of the Kinko's part of its name with the added cost of $696 million.

FedEx, the big boys of Memphis, figured out that it just wasn't a good idea to merge the two brands. They're going in a new direction now. But isn't that a lot of money to pay out for a 'brand name divorce'?

Their new direction will come with the new name FedEx Office and will target large business clients. Basically these guys are getting sick of trying to catch the little fish in the small office space.

When FedEx and Kinko's began working together back in 2004, there were only 1,200 locations. Since that time they have expanded to 1,900 stores. Not very impressive when you realize FedEx paid $2.4 million to open just 700 stores in over 4 years. For a company that size, those are some small potatoes.

Get ready for the "all-out" marketing campaign that will soon follow to brand the new - FedEx Office (Remember these are guys who branded the hell out of the movie Castaway). According to an article in Bloomberg about the 'divorce', that campaign may have already begun:

"The name FedEx Office more accurately represents our broader role of providing superior information and services,'' Brian Philips, the unit's chief executive officer, said in the statement. "We are a back office for small businesses and a branch office for medium to large businesses and mobile professionals.''

It would have been great if Philips then unnecessarily added,

"And, needless to say, we're also a front office for the people who actually work at that particular FedEx Office store. We also enjoy NBC's hit television comedy, 'The Office', which is based on a similarly named British comedy, 'The Office'. . . FedEx Office is totally gonna rule! Anyway, I'm going to 'office-cially' wrap up this press release now, I've gotta head back to THE OFFICE!"

Bloomberg: FedEx to Rename Kinko's, Record $696 Million in Costs, June 3, 2008

There have been talks of the Budweiser owners merging with other big brands for some time, but this new deal sounds legit and there are plenty of strange details to boot.

The most alarming possibility: Global beer consolidation. What the hell does that mean?

A Financial Times' Alphaville post today revealed that InBev is launching a $46 billion plan to takeover Anheuser-Busch.

InBev, a Belgian company whose main beer brand is Stella Artois, is aiming to create the fifth largest consumer products group in the world with the completion of this deal. Obviously a huge deal, but the FT describes it with some very epic language:

The deal is being billed as a “transformational” move by those executives and bankers involved, and is likely to herald the long-awaited end-game in global drinks industry consolidation.

The term 'global drinks industry consolidation end game' really scares me. What the f does that even mean for us? After all the companies have merged, will we someday be drinking a syrupy grog of amalgamated beers and liquors? That is not the jet-pack and rocket-car-filled future I had imagined.

I know, I know, it's probably inevitable that each brand will join up with another brand to increase market exposure in other parts of the world and cut costs, but it's all a little unsettling.

The FT article continues to scare the crap out of me by explaining how the deal isn't yet at a breaking point:

On Friday, sources indicated that while extensive work had been carried out on the transaction, InBev was “not about to push the button.”

Is there really 'a button' for this kind of thing? I imagine it to be a very large red one labeled, 'INSTANT BEER CONSOLIDATION', located right next to the 'emergency beer phone'.

Things continue when the FT describes the combined output of the two brands:

Anheuser and InBev together would be almost equally balanced between developed and emerging market operations across the globe, pumping out around 350m hectolitres of beer and other beverages annually.

Wow, hectolitres? My sources confirm that 1 liter = .01 hectolitres, but seriously, what an odd measurement. Can you imagine going into your favorite brewhouse of choice and ordering 20 hectolitres of your favorite drink? That's the kind of thing a guy could get killed for at the motorcycle wine bars I frequent.

Will this deal help us all get drunk easier?

Let us know your opinion in the comments section.

FT: [Bud & Becks] InBev targets takeover of Anheuser-Busch May 23, 2008

One of the biggest stories in the business world right now is involving Carl Icahn and his plan to get Yahoo, but what does this 'proxy battle' really mean?

Here's a little background: Microsoft said 'Peace out' to Yahoo last week after Yahoo CEO, Jerry Yang, and his posse rolled up to Microsoft CEO, Steve Ballmer's house looking for $37 per share instead of the proposed $33 for their merger deal. As we all know now, that was a case example of how not to pull off a major takeover deal.

Now enter Carl 'The Corporate Raider' Icahn. This guy is well known for being both the 46th richest man in the world and also a very good corporate takeover powerhouse. In the past he's been involved in Blockbuster, ImClone, Marvel Comics, Time Warner, and more recently Motorola. But, he's attempting one of his biggest magic tricks ever with these Yahoo talks.

Icahn was watching the Microsoft/Yahoo deal with a lot of anticipation last week, and was super pissed when Yahoo screwed it all up. He wrote a letter to Yahoo and their shareholders telling them off in some pretty harsh language. According to a MarketWatch article:

Icahn blasted the current board, accusing them of acting "irrationally" and having "completely botched" negotiations with Microsoft over the software giant's blockbuster merger offer.

This guy does not mess around.

Yahoo responded by saying that old man Icahn was a little confused on the details. Apparently all the talk of a $33 offer was only that, talk. There was no deal on the table for Yahoo to sign. It's obvious that Yahoo does not seem happy about the proposition of Icahn getting involved in all this.

But it really doesn't matter to Carl what they think. He believes the battle is on, and he put his money where his mouth is by purchasing 59 million shares of Yahoo in the past 10 days. Icahn is also looking to increase that to $2.5 billion worth of the stock with the current stock price sitting around $27.

Icahn is sending the signals that he is preparing for a 'proxy battle' for the company. Simply put, he is attempting to either convince or buyout the majority of the shareholders of the company so that he can appoint a new board of directors.

It gets even better. Icahn submitted his 'list' of future board members for when he takes over Yahoo and on that list is none other than Mark Cuban. Many people may know him nowadays as the loud owner of the Dallas Mavericks who dresses very casually and competed on Dancing With The Stars.

But back in the heady days before the dot com burst, Cuban sold his company, broadcast.com to Yahoo for a staggering price of $5.1 billion. He is considered one of the ultimate pitchmen for somehow pulling off that deal. It turned out to be a huge bust for Yahoo and they never did anything significant with their purchase.

How weird would it be if Mark Cuban was back in the driver's seat and pulling the strings on another big deal involving Yahoo? I guess Carl Icahn really wants this guy in the corner when it comes down to making a deal stick with Microsoft.

MarketWatch: Icahn reveals plan to take over Yahoo board, May 15, 2008

Slate: What's A Proxy Battle, April 9, 2008

MarketWatch: Mark Cuban Comes Back To Haunt Yahoo, May 15, 2008

The Bear Stearns gang are just hangin' out at 383 and collecting those pay checks because, until the JP Morgan takeover is finalized, they can't be fired.

It was easy to fall into the trap of pitying all those unknowing Bear Stearns employees when their employer went belly-up in March. They had given years of loyal service to their company, and because of sub-prime mortgages and poor management decisions, they were all going to be living on the street.

It's hard to picture them on the street corner wearing nothing but a barrel and suspenders when New York Magazine is printing quotes from guys like this:

“I’d say 50 percent of my department comes in at some point on a given day, and the trading floor is empty. I take one call a week, maybe,” says the Bear employee. “Sometimes I have to, like, print something.”

JP Morgan is notifying thousands of former Bear bankers a week that they will be receiving the ax shortly. However, until all the paperwork is signed next month, they are free to hang out and check their direct deposit balances.

On top of that, laid-off bankers will be receiving at least three weeks of severance for every year served, plus a bonus for sticking around till the sale closes.

The article also refers to the former Bears in hibernation as becoming "spa swans and gym rats." I'm not sure if that refers to women and men respectively, or just a large collective group of metrosexual, roid-raging dudes.

Some people are not very happy about this, as noted by one commenter on the article, named Arcataberry:

"While these leeches are at the spa, I'm sweating my mortgage and the price of gas. Wall Street joins Washington at the top of the list of places Americans mistrust deeply. Gone is the cachet of brokers making sexy deals in high rises. They all look like rats to the rest of us."

I disagree. There are still plenty of sexy deals going on in high rises, those just aren't the ones getting reported in New York Magazine.

New York Mag: Bear Bankers Hibernate With Pay, May 11, 2008

Rupert Murdoch got beat on this one: Cablevision of NY buys Long Island's Newsday newspaper.

You might be asking what the big deal is about a New York cable company buying out a lesser-known suburban New York newspaper. Let's take a look at the players:

Rupert Murdoch - The Fox / Newscorp media mogul currently owns the uber-popular New York tabloid, the New York Post, and also recently acquired the Wall Street Journal after a lot of discussion. He was very interested in adding one other big jewel to his NY media crown with Newsday.

Tribune - The previous owners of Newsday are currently sitting at the #2 spot behind Gannett as the largest newspaper publishers in the country. Not for long. After selling Newsday for $650 million to Cablevision, the company will drop to the #3 spot behind McClatchy, but will still have a 3% stake in the Cablevision's new Newsday venture.

Cablevision - Obviously the big winners in the deal. But it's still not completely clear what they plan on doing with this otherwise dying newspaper. Cablevision already owns the The New York Rangers, the Knicks, and Madison Square Garden, so maybe they're looking to leverage their monopoly on sports coverage?

It looks like things are starting early today. In what seems like one of the best cross promotional schemes of late, the Newsday website is filling its Business Section with stories about the Cablevision network expansion and potential backlash from loyal Newsday reader.

No matter what Cablevision now does with its new find, things are not looking good for the newspaper business in general. Newsday, in particular, is big on using their classified ads section to gain revenue, but it's a dying section of the paper. With free postings on Craigslist that are viewed with much more frequency, why would anyone want to advertise their moldy couch in a paper anymore?

Here's another real promising tidbit for investors. A big part of the purchase is being funded by Bank of America. Do ya hear that? A big bank grew a pair! After the banks have been sitting on the sidelines/licking their wounds/biding their time (and whichever other overused Street clichés you'd care to use) for the past quarter+(with some exceptions like Countrywide), things might be looking positive again for them.

If they're able to step out into deals again, then perhaps the financial industry as a whole isn't the black hole it's being chastised as?

AP: Cablevision buys Newsday from Tribune, May 12, 2008

TheStreet: Cablevision Buys Long Island's Newsday, May 12, 2008

Better cell phones and faster internet speeds could be flooding the market soon. Can you handle it?

The Sprint and Clearwire merger announcement brings news that the new company will be heavily invested in WiMAX technology. This sounds like bringing a gun to the already existing wireless knife fight.

After the Sprint and Clearwire merger is completed later this year, the new company will be named Clearwire. They've got some big-time backers for this deal as well. Intel, Google, Comcast, Time Warner and Bright House Networks will be investing over $3.2 billion to make this baby happen.

Verizon and AT&T better watch their backs because things just got serious. Sprint was always the disappointing little wireless carrier. Even in those lame Alltel ads, Sprint was the fat dumb guy. And what came from that big talked about merger with Nextel, a NASCAR cup series sponsorship?

But the hope for the advent of WiMAX looks to be changing all that. Surprisingly, WiMAX stands for 'Worldwide Interoperability for Microwave Access', but has nothing to do with kitchen based microwaves apparently. (They're missing out on a golden opportunity with Hot Pocket cell phones, though).

This new technology is said to be lightyears faster than what AT&T and Verizon are using. According to the MarketWatch report:

it's a wireless broadband technology designed to operate multiple times faster than today's 3G wireless networks. With embedded WiMAX chipsets in laptops, phones, PDAs, mobile Internet devices and consumer electronic equipment, mobile WiMAX technology is expected to allow users to wirelessly access a range of multimedia applications anywhere in the network coverage area.

This deal has a long way to go before benefiting the customers, but it's something I'm definitely looking forward to. Even if Sprint doesn't 'take over the wireless' market like many people are claiming it will, they will cause AT&T and Verizon to step up their game.

Better service, lower prices, faster networks, it'll be a fantasy land. And you can't complain about the investment potential if a crappy company makes a big move and it pays off.

Are you excited about some new life in the wireless industry? Let us know in the comments section if you think this deal will have any impact.

CNBC: Sprint, Clearwire to form $14.5 Billion WiMax venture, May 7, 2008

MarketWatch: Sprint and Clearwire Combine WiMax Businesses, May 7, 2008