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The End of the Line for the Busch Family

by: Felix Salmon June 17, 2008 | about stocks: BUD / INBVF.PK    
Felix Salmon

Felix Salmon

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That August Anheuser Busch IV is the CEO of Anheuser Busch (BUD) is a feat of nepotism which makes the government of Singapore look like Goldman Sachs (GS).

Andrew Ross Sorkin rehearses the facts:

By college, his transgressions went well beyond youthful indiscretions: A woman he was with, a local waitress, was killed when his Corvette crashed at 6:30 in the morning. He fled the scene and was found with blood on him eight hours later. His close-knit family rallied around him, sent in high-powered lawyers, and the police dropped the investigation after evidence was misplaced.

Two years later, he was involved in a high-speed car chase with the police and was accused of trying to run over an officer with his Mercedes. Again, the family's lawyers swooped in and he was acquitted.

Sorkin concludes that The Fourth "may have inherited his position more than earned it," displaying a hitherto unsuspected mastery of the art of meiosis.

And it's a very relevant fact: There's a lot of low-hanging fruit lying around for a super-professional manager like Carlos Brito to pick. You could say that Brito's $65-a-share offer represents a 35% premium over Anheuser-Busch's 30-day average share price; you could also say that Anheuser Busch has been trading at a 25% discount thanks to its amateur-hour management. Hilariously, the big fights over management and direction have not been between the Busch family and their professional-manager employees, but rather between fathers and uncles and sons within the family. Isn't it time to quietly retire the lot of them, and put someone competent in charge?

Can one make the argument that, over the long term, an InBev (INBVF.PK) takeover of Anheuser Busch might even be better for St Louis than a continuation of the status quo? Frankly, probably not. Once headquarters move to Belgium, a certain amount of high-end economic activity will inevitably leave St Louis. On the other hand, anybody in the area with Anheuser Busch stock is likely to become wealthier than they ever thought they would be. If I were a local, I'd be sad at the passing of a local icon, but I'd shed a finite amount of tears and move on.

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This article has 14 comments:

  •  
    Jun 17 07:13 PM
    August Anheuser Busch IV seems more like a criminal than a CEO of a Fortune 500 company. I am glad he will be forced out when Inbev takes over this company which has been run into the ground by the Busch family.
    Reply
  •  
    Jun 17 09:54 PM
    That's hogwash! Though the Busch family is ripe with juvenile offenders (i.e. Peter Busch "accidently" shot and killed a friend when just a teenager and also served no time and now lives it up on the Palm Beach polo fields), AB has done extraordinarily well in the US markets, despite some pretty significant obstacles. I like the idea of someopne coming in and trimming the fat, but I don't know that I agree that we should give aware our great US brands to foreign companies everytime the economy gets sluggish.

    I think that in the long run it will be seen as a mistake!

    Also, a little trivia! Can anyone guess what Arizona Bud wholesaler came to little Auggies rescue when the police came knocking?!?!?!
    Reply
  •  
    Jun 17 10:26 PM
    If these guys were serious they would own more tha 4% of the stock and quit granting options to those who dont keep them
    Reply
  •  
    Jun 17 11:03 PM
    Hensley & Co...
    Reply
  •  
    Jun 18 12:52 PM
    One would hope that InBev would be more responsible than Anheuser-Busch leadership in limiting its product development and marketing to youth, the AmBev has not always been a good player in Brazil. A-Bs product lines like Bicardi Silver and its new product Tilt should just be eliminated after InBev takes over -- and then the company could argue that it produces quality beer instead of training drinks for youth.
    Reply
  •  
    Jun 18 02:38 PM
    So, Ted Kennedy can be a US Senator, but AB IV isn't qualified to be a CEO? Give me a break. Also A-B does more than any other company to combat underage drinking. Any self respecting teen wouldn't be caught dead drinking Bacardi Silver, it's Mickeys Big Mouths and Heineken!
    Reply
  •  
    Jun 18 03:15 PM
    It would be an interesting twist and a more "balanced and believeable" story if you exposed ALL of your past indescritions also? OR are you the one human on this earth that is "PERFECT???????&q... Why don't you shut up if you can't write anything intelligent and have to resort to mud slinging? What in the world do the poor choices of a young man have to do with his ability or knowledge to run a company years later? Hummmm sounds to me like you would like to be in his shoes and have the mercedes, women, money, power and most of all a "supportative family"? His family did nothing more or less than anyone with a child in trouble regardless of that childs age. They used all their resources (wealthy or not) to help their child. They are people with feelings and emotions just like most of the population (although your mud slinging mindless stories are making me wonder about you) . I have a suggestion for you. When you have something intelligent, researched and relative to the issue at hand, write it and we will gladly consider it, but the jealous ramblings of some under paid 2nd rate writer who does no research that is relative to the current issue just looks for dirt from the distant past is not worth my time or your energy. It is useless information and shows how childlish jealousy can lead to making a fool of ourselves at any age.
    Reply
  •  
    Jun 18 03:52 PM
    AB claims to be an American Icon... If you look closely you will notice that they have had declining sales for the past 20 years........
    Reply
  •  
    Jun 18 04:16 PM
    look a little closer you are incorrect User 212392
    Reply
  •  
    Jun 18 05:34 PM
    I'm an Anheuser-Busch shareholder and I have one question?

    When AB signed off a distribution agreement with InBev for Stella Artois, Beck's, Bass, Hoegaarden, Leffe, Lowenbrau, Tennent's and Boddingnton's; why didn't Anheuser-Busch take the opportunity to create a simillar distribution aggreement with InBev to take the flagship Budweiser brand to InBev International's foot print? I think that would have created an execellet distribution opportunity to build the Budweiser brand to where it should be.

    Also, if today's Americans did care about their American Icon brands, they would be buying Budweiser, Bud Light and Michelob instead of trading up to European brands, right? AB has over 160 brands in the market and I'm sure you as a consumer would be able to find the one you like.

    On a side note, what kind of car do you drive? Is it American made? Perhaps, we need to look at our daily buying power choices and looking into our own product goods before it's too late to save it!

    By for now...
    Reply
  •  
    Jun 18 08:27 PM
    we drive FIVE AMERICAN MADE CARS!!!!!IS THAT ACCEPTABLE WITH YOU?
    Reply
  •  
    Jun 19 10:46 AM
    Wow! Forget BUD stock! No Kids needs to look at investing in some Vagisil.
    Reply
  •  
    Jun 19 10:56 AM
    To: nokdzplz

    I wasn't directing my question to you, instead to today's reality that you can find some foreign items with better quality and pricing than our own. Consumers are always looking for variety and best value for their buck.

    Before you get defensive over my words "quality", let me add; there is no better quality beer than Anheuser-Busch products. Hints, the reason I own a substantial amount of AB stocks.

    By for now...
    Reply
  •  
    Jun 19 02:15 PM
    The product "I drink therefore I am" has nothing to do with beer or any drink that I am aware of. Maybe you should slow down the "drinking therefore you are" and research YOUR products before posting advice about them on the internet. The product I dare say is not even for the purpose I suspect you are implying, but used for other needs of a gender of our population of which I am not a part of. But before I make a comment like that I would be sure of what exactly the product was intended for so I don't look so uneducated and for lack of a better term uninformed.

    I care nothing about your opinion, I just feel things that are said about a person(wealthy, powerful or poor) should be relevant, true and honest. The story that was printed has nothing positive to offer anyone. It is just someone digging up past youthful problems of which we all have had in varying levels of seriousness. I don't care how much or how little AB stock anyone owns. That is their business. I am only concerned that this country and our citizens learn to treat each other with respect, dignity and leave personal issues to their personal lives (in other words, his problems years ago are between himself and his family.) None of our business in other words!
    Reply
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