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U.S. lawmakers are appalled at a foreign takeover bid for an American beer icon. The truth is Anheuser-Busch was a sitting duck -- a lesson in poor strategy that wise managers would do well to learn. The St Louis-based brewer of Budweiser, now a takeover target of European brewer InBev, failed to expand abroad in a meaningful way, so its share price went nowhere over the last five years as it missed growth opportunities. Missouri senator Claire McCaskill vowed on Tuesday to do everything possible to "stop the sale" of Anheuser which is based in her state. InBev Chief Executive Carlos Brito promised this week to keep the home of Budweiser, America's "King of Beers" in St Louis. What he did not say was that Anheuser's lack of ambition abroad had made it vulnerable. Anheuser missed chances to expand in South America with AmBev in 2004 and then Bavaria in 2005, and also into the fast-growing Russian beer market. It only announced plans to build its first brewery outside the U.S. from scratch last year. "There has been no effective international strategy at all and its expansion abroad has not made a material difference to Anheuser and left it open to a bid," said one banker who did not want to be named. Belgian-based InBev, brewer of Stella Artois and Beck's, launched a $65 a share bid for Anheuser last week, valuing the biggest U.S. brewer at $46.3 billion. The Budweiser and Bud Light brewer has only said it will evaluate the InBev proposal carefully. SALES STAGNANT, COMPETITORS GEAR UP Anheuser still earns 85 percent of its profits from the U.S., where the beer market has stagnated. Though it is by far the biggest U.S. brewer with a 48 percent market share, its earnings are under pressure from a slowing economy and strong competition from spirits and wines. While it pursued a muddled international growth strategy, the company that was the world's largest brewer ignored a spate of deals that made its competition more efficient and powerful. South African Breweries bought Miller in 2002 to form SABMiller then picked up Colombia-based Bavaria in 2005, while Belgium Interbrew bought Brazil's AmBev in 2004 and MolsonCoors was created from a 2005 merger. Anheuser was overtaken as the world's biggest brewer by beer volumes by InBev in 2004, SABMiller Plc in 2005 and Heineken earlier this year with its purchase of part of Britain's Scottish & Newcastle. The company's bid to grow outside the U.S. started largely in 1993 with a focus on Mexico and China and later into Europe, but its investments in China compete against each other and expansion in Europe is hampered by a dispute with Czech brewer Budweiser Budvar. Although Anheuser owns 50.2 percent of Mexico's biggest brewer Modelo it has no management control and receives a dividend from its stake rather than manufacturing or distribution benefits. Analysts say that lack of co-operation between the two is emphasised by Anheuser launching Bud Light Lime to compete directly with Modelo's Corona in the U.S. market where the Mexican brand is the number one imported beer. Media reports have suggested Anheuser is looking to merge with Modelo as a bid defence, but the Modelo family which has a controlling voting share is thought to see little advantage to selling out just to save Anheuser's independence, analysts said. "Modelo is not a poison pill - it is a big opportunity," said analyst Gerard Rijk at brokers ING, explaining that including the Corona beer brand would make Anheuser an even better target for InBev and give it access to one of the most attractive global premium beer brands. Anheuser was one of the first big brewers to enter China in 1993 with a 5 percent stake in Tsingtao which it pushed to 27 percent by 2005. Meanwhile, in 1994 it agreed to pay for a stake in a brewery in Wuhan to brew Budweiser. Its investment rose in 2004 when Anheuser bought China's fifth biggest brewer Harbin for $720 million in northeast China fighting off SABMiller to pick up 13 breweries and some well known local beer brands. But the move meant its Harbin brands competed with Tsingtao, and the relationship between the two deteriorated especially after plans to built its first ever brewery from scratch outside the U.S. in southeast China to expand Harbin beers across China. In Europe, Anheuser took control of a brewery on the River Thames in London at Mortlake to brew Budweiser in the 1990s, while the brand is also brewed through licence deals in Ireland, Italy, Russia and Spain. The group has rights to sell its Budweiser brand in 22 of 27 European Union countries, but in reality has made little progress in Europe and still faces problems with a trademark dispute with the Czech state-owned Budweiser Budvar, analysts said. The e-commerce company in China offers quality products such as Handheld Gps Navigation , China External Battery For Iphone4, and more. For more , please visit Portable Vehicle Navigation Gps today!
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