InBev-Bud: The Brazilians Are Coming

There's an air of inevitability about this InBev bid for Anheuser Busch: it might take a while, it might end up having to be raised, but I have a feeling that, sooner or later, it's going to happen. When it does, the world will finally have a truly global brewing company - and that company will be run by Brazilians.

InBev, of course, is the result of a merger between Brazil's Ambev and Belgium's Interbrew. But although the Belgian company was larger, it was the Brazilians who took the reign, with InBev being run by CEO Carlos Brito and CFO Felipe Dutra. These guys think big: Dutra has been negotiating with Jamie Dimon directly about a $40 billion syndicated loan plus a bridge of somewhere between $10 billion and $17 billion.

Banks like JP Morgan and Santander are happy to lend Dutra the money because he's the kind of client they love: global, powerful, and very efficient. The storied Busch family might not like this kind of thing, but then again they might not have much choice:

After delivering better-than-announced savings in the merger of Interbrew and AmBev, the management team at InBev has a reputation for ruthless efficiency in cutting costs. The mooted cost savings in a deal with Anheuser would be in line with other deals in the beer industry - though those close to the company expect that the level of savings announced would be exceeded by InBev's cost zealots.
A large portion of the savings would come through extending zero-based budgeting - a savings system which requires businesses to justify every expense anew each year - to Anheuser's business.

In this sense, the Brazilians are to beer as the Mexicans are to cement: one of the few huge companies which has a proven track record of successfully implementing large acquisitions around the world. As such, they can pretty much raise as much money as they like, whenever they like. Even now.