Family Business or Corporate Behemoth?

My buddy Jay Brooks has weighed in on the InBev/A-B deal with his usual panache and intelligence. Worth reading.

But to his comments: I would reply that the difference here is not that A-B is an American company, but that the same family has maintained stewardship, and that's a LOT different that another corporate-owned company going foreign. Eg, SAB bought Miller from a huge global conglomerate, Philip Morris. Similarly, A-B bought Latrobe from Labatt, which was itself owned by InBev.

Put another way, at the time of the sale, Latrobe had long since ceased to be an "American" brewing company. Ditto Miller. Moreover, both had long since lost "family" stewardship.

So there is a special circumstance surrounding the possible A-B sale: No, the Busch family does not hold controlling shares, but for 140+ years, with only one or two brief exceptions*, the family has maintained a hold on the leadership. That alone speaks volumes about the way in which A-B is imbued and endowed with the heart and soul of that family. Indeed, I would argue that it's the company's most valuable asset. (And of course, I would be told I'm nuts by most industry analysts....)

________________________

* In the early 1970s, Richard Meyer served briefly as president, the first non-Busch to do so. I think that since then, there's been one other non-Busch in the office.

Dear August: Over the past 140+ Years....

... Your family's company, Anheuser-Busch, has embodied the American dream and proved a remarkable study in ambition, business savvy, and entrepreneurship. . . "

Okay. No, I won't be sending August Busch IV any such letter. And yes, that's a riff off the letter sent to him by the Carlos Brito of InBev. And yeah, okay, it's all business and I'm a sentimental sap. And you can read all about InBev's proposed offer today just about any place on the web, including here at the New York Times.

But if I could say something to Four [and his father Three], I'd say: DON'T DO IT. (And if I could say something to the family members that want the deal, it would be: "Short-term gain isn't all it's cracked up to be. Just ask the Millers and Uihleins.")

But that's not how business works. Sigh.

Anyway, for this first post-vacation blog entry, I had planned to mention that I'm back home after several weeks on the road and isn't it weird to be back and have access to a computer after being off-line for the better part of a month and I'm tired from traveling but also because I have pneumonia [the perfect vacation companion] . . . Blah, blah, blah. But the hell with it. I'm home. I'm sick (and hoping that the antibiotics kick in soon...) I'm just in time to watch The Deal Go Down.

(Family) History Repeating Itself

As I noted a few days ago, the Big Alarm Bell re. the possible InBev buyout of A-B is the family factionalism -- which is definitely no longer behind the scenes. Today's Wall Street Journal offers up more comments from pro-sale family members (including the deliciously named Adolphus A. Busch IV).

All I can think of, naturally, are the family factions that provoked the demise of Schlitz (in the 1970s) and the sad decline of Miller (in the 1950s and into the 1960s). For us anti-sale types, this ain't good news.

On a cheerier note, I describe Adolphus IV's name as "delicious" only because, ya know, Adolphus The Original still looms large in this historian's mind. The families descendant from Eberhard Anheuser and Adolphus Busch are riddled with men named August and Adolphus, many of whom carry middle names of Anheuser, Adolphus, or August. There's a reason that men like August Busch III and Gus Busch, Jr. (his father) ended up being called Two or Three. It's about the only way to keep them straight -- although doing so assumes prior knowledge of who is the son of whom. And it's all pretty confusing, even for someone like me who has a fairly good mental image of a complicated family tree. None of which has anything to do with anything.

But for those who are following the InBev/A-B story, it's worth taking a look at this piece in today's breakingviews.com about why InBev is also interested in SABMiller.

InBev choosing Miller over A-B? Given the Great Beer Battle of the 1970s (Miller's John Murphy setting out to demolish A-B, and A-B's Augie Busch (aka August IV) squashing Miller and Murphy into non-contention), wouldn't that be ironic as hell?

One more point for all you journalist types: it's FIVE generations of Busch men. Toss in Eberhard Anheuser (who is the maternal grandparent of four of those generations) and you've got six generations at the helm.

For those who are counting, they are: Eberhard Anheuser, Adolphus Busch, August Busch, Sr., August Busch, Jr., August Busch III, and August Busch IV. And if anyone cares: Adolphus's original choice for brewery heir apparent was his son Adolphus. But that Adolphus died young and unexpectedly Son Peter was a wild man whom Papa Adolphus disowned, so a reluctant August Busch Sr. ended up running the brewery as Adolphus retired. It was he who steered the company through Prohibition. His two sons, Adolphus and August, Jr., took over. Adolphus died fairly young in, if I recall, 1944, and August, Jr. ran the show until son August III more or less ran him off.

Confused yet?

InBev and A-B. Clash of Cultures?

Today's Wall Street Journal has a number of follow-up pieces on the possible InBev takeover of Anheuser-Busch. Unfortunately, unlike yesterday's great front-page piece, none of these are accessible without a subscription. (What's up with that anyway? Why are parts of the WSJ free online and other parts are not??)

But here's the drift: One piece examines the way in which InBev's go-go, macho culture may clash with A-B's more regal, attention-to-detail approach to business. It also points out that InBev has a history of installing its own people in companies that it acquires. (I guess that's no surprise....)

Another report argues that InBev may encounter resistance from those who don't want an American icon sold to a foreign company. This piece can be read free: speculation about how Warren Buffett may react to the proposed purchase. (Buffett's Berkshire Hathaway is A-B's second largest shareholder.)

The Journal also contains most of the text of a piece that originated at breakingviews.com. This one looks at corporate family dynasties, and argues that times change; sentimental saps need to get over it and move on. (Auggghhh. Help me get this knife outta my heart.)

More on the Possible Anheuser-Busch Takeover

Today's Wall Street Journal contains a fascinating piece about the possible takeover at Anheuser-Busch.

It's a marvel of reporting, if only because the reporter apparently persuaded August Busch IV to speak frankly about his family's history and his relationship to his father. But it's also newsworthy because it reports on a second battle-in-progress: a behind-the-scenes struggle between a family faction that wants to sell and the group that wants to stand fast.

Wow. I pray that history does NOT repeat itself: intra-family factional struggles like those are what brought down Pabst Brewing in the 1950s and Schlitz Brewing in the 1970s. If InBev succeeds, it probably won't end up with much: Brewing's history has shown over and over again that when family leadership is destroyed, the brewery is, too. (It's worth noting that when Miller bought Leinenkugel back in the 1980s, Miller left the Leinenkugel family in charge. It can't be an accident that twenty years into that purchase, Leinie is doin' just fine.)

This story is becoming more painful by the moment. But again, I'm a sap. I REALLY want the Busch family to remain company leaders and stewards.

As the Cosmos Tilts.....

Coming up briefly for air (although not much air; I am sick sick sick and wheezing like a broken accordion) to comment on a news wire item in the New York Times:

For months, rumors have wafted hither and yon that InBev and Anheuser-Busch would merge. But -- it looks as though it may happen. Or that InBev hopes it happens. And that, again according to this wire report, A-B will resist.

Okay, so big deal, right? One big corporation tries to take over another. Happens all the time. Blah blah blah.

Except that -- it's A-B. And having spent five years of my life living, at least mentally, with A-B and knowing that it's survived all these years with a Busch at the helm and yeah it's a huge corporation but it started life as a tiny, no-account, not-very-good brewery and its history embodies the immigrant experience and here it still is all these years later -- well........ you can hate the beer (I don't, by the way), but unless you're a soulless jerk, you've gotta admire the tenacity, smarts, and ambition of the family that made that company what it is.

And yes, I know they don't control the company, at least not on paper or in number of shares. But they are still its heart and soul

. So should this merger come to pass, I will feel as if the planet's axis has shifted. As if the cosmos has tilted just a wee bit. Ridiculous to feel that way.

But there ya go. I'm a sentimental sap. (And no, for the five millionth time, A-B did not pay me to write the beer book. Indeed, as I've said many many times, the company was actively uncooperative.) And now I'm taking my sick lungs and aching head and runny nose back to bed -- so I can rest up for the next round of travel. I'll be back in mid-June.