Inbev Case Study

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EXECUTIVE SUMMARY The brewing industry has enjoyed high margins and steady growth for decades. The acquisition of Anheuser-Busch (hereafter to be referred as “AB”) by InBev was regarded as an opportunity and a challenge for the executives and shareholders of both companies. Our report would examine the strategic rationale of the merge and qualify and quantify the synergy effects from revenue and cost. Also, we provide suggestions about culture integration for the newly merged firm. Finally, though the premium overweighs the synergy effects, we believe the competitive advantage of combined firm would benefit its shareholder in the long run. STRATEGIC RATIONALE The value creation by merger of InBev and Anheuser-Busch fits well the synergy…show more content…
The merger creates a surplus in staffs. Thus, the proposed reduction of 1,185 positions and early retirements would save 150M. Third, the operations in China could be optimized from the merger. The integration of marketing and distribution channels in China would save 55M. In addition, improvement in operation efficiency is foreseeable. The merger would eliminate overlapping corporate functions such as information system management, inventory management and etc. Also, the improvements in procurement and reductions in SKU would also create savings. In total, we estimate those effects would save 575M. At last, because of the leading position in brewing business and influential market power after the merge, we forecast a better rating for the corporate debt of the merged company. Thus, the cost of financing would reduce. Also, the exchange of best management practices between firms would not only enhance the operate excellence but also save money for the firm. INSIGHTS: CULTURE INTEGRATION We regard the integration of cultures of both firms as a important value-added method. After the merger of InBev and Anheuser-Busch, the culture at the newly formed company is likely to be affected by certain factors that are contradictory to InBev’s and AB’s strategic policies and employee relations. Because of InBev’s traditional cost-cutting approach to mergers and Anheuser-Busch’s approach of luxurious spending, there might be a mismatch of objectives

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