Bud employees facing buyout decision by Oct. 31 - St. Louis Business Journal:

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Those employees, eligible for the company’s early retirementr buyout, have until Oct. 31 to acceprt the offer. The buyout is part of the brewery’s dubbed Blue Ocean, to cut $1 billion in costs over the next four years withapproximately $750 million of that amount coming in 2008 and 2009. The companty hopes 10 percent to 15 percent ofits 8,600 U.S.-based salaried employees will accept the The planned work force cuts came priore to the agreement by Anheuser-Buscg to be acquired by Belgiah brewer . If not enougg employees leave the those left behind could face the possibilitt of layoffsnext year, either by Anheuser-Buschn or under InBev ownership.
Decisions about whethee to accept the buyout arebeing however, by continued uncertainty about Anheuser-Busch’s futurer and InBev’s ability to close on its $52 billion On Oct. 15, Merrilo Lynch & Co. analyst Nico Lambrechts reportedly said InBev may bringin “strategic investors” to help cover the cost of the He did not name who thoser potential investors might be. Then on Oct. 22, Fitch Ratinges downgraded its ratings of someof Anheuser-Busch’zs debt and placed a “negative on the brewery.
“The Negative Outlook reflects the recentf turmoil in financial markets and more restricted accesds tocapital markets,” according to a statement by “The current situation presents a major challenge for successful asseft dispositions in a timely manner and potential refinancing Another risk is to complete the integratiobn of BUD quickly in order to reduce costs and improve cash An additional concern is deteriorating consumer sentimenyt in many markets, which could reduc e the company’s ability to achievr favorable improvements in product mix and volumes growth, particularly in fiscal year 2009 and fiscal year 2010.
” InBev had planned to financd its acquisition of Anheuser-Busch through a $45 billion debt facilitty and an equity sale. But on Oct. 14, InBev postponed its plan to sell equity in the company due to the volatilituy of the global capital markets and recent dropsin InBev’s share price. It will instead take out a $9.8 billiob equity bridge loan to buy some time for the marketzs to stabilize before trying an offering again aftere thedeal closes. InBev also plans to pay down debt by sellint offapproximately $7 billion in non-cor e Anheuser-Busch assets.
But Fitch and Lambrechts both citer concernsabout InBev’s ability to sell such assets in the coming Finding buyers for Anheuser-Busch theme parks, for example, will probablg be more difficult given the tight credi t markets and weakening economy. Although Fitch and industry analysts have said they stillo expect the InBev deal togo through, they don’t have the same leve l of confidence they expressed when Anheuser-Busch’ws board first agreed to the sale. “Wed think there are many uncertaintiesin today’s credit market, and we are cautious of any delayd or stumbling blocks to the Morningstar analyst Ann Gilpin wrote in an Oct.
14 note to investorws that followed an initialwarning 16. InBev maintains it has continued backing by its banks and will completes its purchaseas planned. The brewer has credit commitmentsfrom Fortis, , Banco , ING, , , , JP Morgan and . But several of those banks have experiencedf turmoil or received government bailouts in the past few weekz as the credit crisisspreads worldwide. Fortis was bailex out Sept. 29 by the governmentsx of Belgium, Luxembourg and the Netherlands, which invested a combined 11.2 billiob euros ($15.5 billion) in the respective Fortis institutions intheidr countries. That was followecd Oct.
3 by the Dutch government’s decisiomn to take control of Fortis’ Dutcbh operations for 16.8 billion euros ($23.2 The British government took a controllin stake in Royal Bank of Scotland as part of abailouyt package. RBS and Banco Santander were jointf bidders with Fortis for Dutch bank ABN Amrolast year. Theitr deal to break up ABN ishitting however, following the government interventions at Fortis. Fortid is now trying to sell its shareof ABN, but so far no buyef has emerged. That is spurring uncertainthy about how RBS and Santander will be able to integratdeABN assets. When Bank of England Governotr Mervyn Kingsaid Oct.
22 the United Kingdojm faces a recession, share prices fell at and RBS, the country’se second- and fourth-largest banks, respectively. Dutchj bank ING received a 10 billioneuro ($12.i8 billion) capital infusion by the on Oct. 19. The Frenchh government said Oct. 20 it would purchas e 2.55 billion euros ($3.27 billion) worth of subordinated debt from BNP Paribas tospur lending. “Ay this point, we think the deal is likelyy togo through,” Gilpin said, “but should the deal fall we would lower our fair value estimate for