Budweiser brewer, Anheuser-Busch, has agreed to a take-over bid of US$52 billion by its Belgian rival InBev forming the world's largest beer producing company. The formation of the new company, to be called Anheuser-Busch InBev, was unanimously approved by both boards of directors at the weekend.

Anheuser-Busch shareholders will receive $70 per share in cash. The companies have limited overlap in global markets and together sell about 300 brands, including Anheuser's Budweiser and Bud Light, the world's largest selling beers, and InBev's Stella Artois, Beck's, Bass and Hoegaarden. Joint revenue for 2007 was $36.4 billion.

InBev CEO Carlos Brito will become chief executive officer of the combined company which will set-up its headquarters for the North American region in St. Louis, Missouri, home of Budweiser. All of Anheuser-Busch’s U.S. breweries will remain open.

The board of directors of the new company will be made up of the existing directors of the InBev board, Anheuser-Busch president and CEO August Busch IV and one other current or former director from the Anheuser-Busch Board. The new management team will draw from key members of both InBev’s and Anheuser-Busch’s current leadership.

Anheuser-Busch will become a wholly owned subsidiary of InBev upon the completion of this transaction.

Anheuser-Busch has equity investments in companies in two key markets: Mexico’s Grupo Modelo, which owns Corona Extra; and China’s Tsingtao, the leading Chinese premium brewer. In addition, Budweiser is a strong and growing brand in northeastern China, while InBev’s is mostly active in southeastern China.

The merger is forecast to yield cost synergies of at least US$1.5 billion annually by 2011 largely driven by sharing best practices, economies of scale and rationalisation of overlapping corporate functions.

The transaction is subject to the approval of InBev and Anheuser-Busch shareholders, and other customary regulatory approvals although the deal is expected to be completed by the end of 2008.