The Prince of Beers Read Online Free Page B

had little experience in finance, manufacturing, or the international markets crucial to the company's future. He had been a heavy drinker for two decades. He rarely had less than three drinks a day, and often he had many more. Analysts and journalists questioned whether he was up to the task. He was caught in a Catch-22. He had to overhaul Anheuser to succeed. But until he succeeded he wouldn't have the necessary credibility to make a dramatic overhaul. Making matters worse, his dad stayed on Anheuser's board and kept meddling. In 2008, The Fourth told The Wall Street Journal that he had considered buying an energy drinks company but that his father opposed the deal, which went nowhere. The Third even tried to stop his son from picking his own executives.
    So Anheuser spun its wheels through 2007 and the first half of 2008. Then the Brazilians at InBev called.
    The Fourth promised he wouldn't sell, but he had little choice. By 2008, the Busches owned less than 5 percent of the company that bore their name. After a lost decade, shareholders were in no mood to listen to more promises of better times ahead. Anheuser tried to rally politicians against the takeover, but its argument that beer was a strategically vital product that had to remain American-owned went nowhere.
    To keep A-B independent, Busch IV had only one option, buying the half of Groupo Modelo it didn't own already. Anheuser didn't have enough cash on hand to buy Modelo, so it would have to issue billions of dollars of bonds to do the deal. The debt would interfere with InBev's plans to issue its own new debt to buy out A-B's shareholders. Essentially, by messing up its own good credit, Anheuser could stop the InBev takeover.
    Julie Macintosh, a reporter for the Financial Times, chronicled the fight in her engrossing 2011 book Dethroning the King: The Hostile Takeover of Anheuser-Busch, an American Icon. Among other tidbits, Macintosh reported that investment bankers involved in the deal christened Busch III "Crazy" and IV "Lazy," because The Fourth so often seemed disconnected at crucial meetings. What outsiders didn't know was that by the spring of 2008, the stress of trying to run A-B had left Busch IV prone to panic attacks. To try to stay calm, he was taking heavy doses of the prescription anti-anxiety medication Xanax, a strongly addictive and often abused drug that can cause listlessness, slurred speech, and confused thinking.
    Even so, Busch IV badly wanted to keep Anheuser independent. By Saturday, July 5, the company had agreed to buy Modelo. On Independence Day weekend, Anheuser-Busch looked like it might escape InBev and remain a standalone company.
    Then August Busch III stepped in. On July 7, at an airplane hangar owned by A-B at the Spirit of St. Louis Airport, the Anheuser board met to talk about the Modelo deal. The Third came out against it. He questioned whether Anheuser's management team — including his son, of course — had considered the risks of taking so much new debt. He wondered whether the two companies could mesh, whether the deal would ultimately work. By the end of the meeting, the board had basically rejected the deal. InBev was the only alternative.
    Six days later, on July 13, Anheuser announced that it was selling itself to InBev for $52 billion in cash. The name of the new company was Anheuser-Busch InBev, but that fig leaf didn't hide the fact that the Brazilians were in charge. August Busch IV was the only A-B board member to join the new company's board. One hundred forty-seven years after Adolphus Busch married Lilly Anheuser and began the Busch dynasty, Anheuser-Busch was no more.
    The Third's influence on the Anheuser-Busch board cannot be overstated. If he had wanted the Modelo deal, it is hard to imagine the other directors saying no. The $52 billion question is why he went the other way, why he ultimately took A-B away from his son less than two years after giving him the top job. In the epilogue of Dethroning The