Dethroning the King (54 page)

“I remember sitting next to Joe on several of these flights, and I remember him being pretty upset, thinking that we could have fought more, we could have gotten more, and that we had been quick to take a bid,” said one Anheuser-Busch advisor. “I think that Joe passionately cares about this stuff.”

“He clearly was upset by some of these things, because he felt the board had moved quicker than he wanted it to.”

Eventually, though, Flom's pragmatism won out. He and Larry Rand shared a car back home that night after their plane landed in New Jersey, and by that point, he had turned his preternaturally energetic attentions toward the future—he was planning an elopement in Europe.

“While all this is going on, he meets and marries a girlfriend based, I think, on a blind date,” said one person on Anheuser's team. “That's impressive.”

“When you're my age, you can't waste time,” Flom liked to say as he told the story.

On another Anheuser-Busch jet that evening, this one bound for Washington, D.C., Jim Forese, Ambassador Jones, and General Shelton commiserated as well. They had boarded the plane in St. Louis with an emptiness in their guts and weren't particularly eager to drink, though Shelton wouldn't have tipped one back even if the mood had been sunny. He never imbibed while flying—private or commercial—to keep his senses sharp in case something went wrong. It was a habit he picked up in the Army's airborne special operations.

Anheuser-Busch was a global icon, and the last major beer maker in the country that was still American-owned. “When you look at A-B and Harley-Davidson, and Ford Motor Company, these are companies that represent America,” Shelton said. Anheuser's era as a member of that dwindling club had ended in the blink of an eye, and the trio's sense of loss was overwhelming. “It was almost like ‘This can't be happening, ' ” he said.

Feelings of self-doubt nagged at Ambassador Jones the entire flight back. “Could I have done something else?” he thought. “Could we have prevented this?” It was hard not to second-guess the board's decisions. Those pangs never really subsided, even after wild gyrations in the market in the months that followed made the board's timing look brilliant.

“We had some opportunities to buy some quality companies in Europe and we didn't—this was when August III was CEO—because he thought they were overpriced. And in the presentations that were made, it sounded like they were overpriced,” Jones said. “So we may have missed some good opportunities overseas. That might have made a difference. That might have made us somewhat invulnerable.”

“If I had to put my finger on any one thing, I would say we probably were too conservative,” agreed Shelton, who found himself wishing there had been someone on Anheuser's board who would have pushed harder to do deals. “When you live in a world of either ‘buy' or ‘be bought,' you've got to be growing faster than we were growing externally. We should probably have been more aggressive in pursuing other opportunities.”

“When you watch a company like Molson buy Coors, and SAB buys Miller, in the back of your mind you think, ‘If we had been willing to maybe accept a little lower credit rating and been less risk-averse, would we not have fared a lot better in the long term?' ”

Not a single move was made to pay tribute to what had just happened before the directors walked to their jets that evening—not one speech in honor of what Anheuser-Busch had accomplished over the past century and a half, not one note of formality to mark the end of an era. Anheuser-Busch wheezed its final breaths in the fluorescent-lit makeshift conference room of a St. Louis airplane hangar. It was a far cry from the rich, evocative imagery the company had always projected.

“That was it,” Shelton said. “We got on the plane and flew back and it was all over.”

Back in New York, InBev's core handful of executives, bankers, and lawyers prepped for what they hoped would be the biggest day of their professional lives. There was still a great deal of work to be done—legal disclosures that needed to be reviewed, press materials that needed to be vetted. It was hard to concentrate. They were waiting anxiously for a call from Anheuser to confirm that its board had approved the deal. If that call never came, their efforts would be pointless.

As the summer sun set that evening, the team grew nervous. Anheuser-Busch's board was bound to take an hour or two to fully vet and approve the deal. As two hours stretched into two and a half and then three, still with no phone call, the tension on Park Avenue intensified. Anheuser's board wouldn't dare hang InBev out to dry after wading this deeply into merger talks, would they? Up until that Sunday, the deal had progressed at a shockingly rapid-fire pace. Were they suddenly getting cold feet? Did they want more money? Were the Mexicans back in town? With Anheuser's whole team now in St. Louis, InBev could no longer cajole them into submission face-to-face.

Everyone in the room seemed on edge. This takeover bid was about to make or break each of their careers. They put their heads down and concentrated on the piles of antitrust filings and press materials in front of them. Brito, in particular, refused to loosen up. As he repeatedly made clear, the deal wasn't done until he got word from Anheuser-Busch firsthand. He wasn't the type to celebrate prematurely.

At around nine or ten o'clock that night, Brito's cell phone sprang to life. He put up his hand to quiet his colleagues and answered the phone.

August IV's lilting drawl came through from St. Louis on the other end of the line. His board had capitulated, he told Brito wearily. Anheuser-Busch was InBev's for the taking. Brito's dark eyes lit up as he disconnected the call, and the InBev team devolved into a round of whoops and back-slapping hugs. A few moments later, they gathered around a table where a round of Budweisers had been laid out on ice a few hours earlier in anticipation, next to some of the Stellas and Beck's they usually imbibed.

“Nobody touched the Bud until Brito had gotten a call from The Fourth,” said one person who was there that night. Once that call finally came in, though, InBev's team cracked open the King of Beers for a toast, pulling out their cameras to document the moment as they knocked the drinks back with the exhilaration that comes with a hard-fought victory.

“There aren't that many deals where you literally get to drink their products in toast when you win it,” said one person close to InBev.

It took an extra handful of hours to finalize the merger agreement once Anheuser's approval came in, which proved excruciating for both sides. InBev's camp couldn't wait to publicly declare victory, and the exhausted Anheuser-Busch team was ready to reclaim their lives. Anheuser-Busch had pulled many of its legal documents together in just 48 hours, so the delay was not surprising. It was like watching paint dry, a frustrating lull before a hugely anticipated moment.

As Skaddden combed through the merger agreement one last time, and as InBev pored over the reams of documents Anheuser-Busch had hastily submitted over the past two days, Brito took up residence in a separate room to be briefed for the following day's press conference. Mid-evening melded into late night and then early morning on Monday, the day InBev had hoped to announce its coup before markets opened in Europe. Some of the lawyers had been onsite on Park Avenue by that point for nearly two straight days, and many hadn't caught a wink of sleep. A few had holed up for catnaps in dark nooks and crannies, spread across or beneath rows of chairs.

“You'd sort of walk into a conference room, the lights would be out, you put the lights on, and there would be somebody sleeping in the corner,” said one InBev team member.

Then, to InBev's great relief, Skadden finally announced that it was comfortable enough to let InBev issue its press release. Brunswick's Steve Lipin, who had repeatedly reviewed each line of the release to make sure everything was in order, conducted one last run-through with InBev's top two PR staffers. They were just about to press the button to send it to the news wires when they realized that while the document was still dated Sunday, July 13, the clock had already flipped over to Monday in New York and Belgium. For a few seconds, yet another administrative obstacle looked like it would delay InBev's moment of glory.

“It's still Sunday in St. Louis!” someone suddenly blurted out. The team digested the statement for a few seconds and then nodded in agreement, breathing a huge sigh of relief. They made sure that their press release included a Sunday dateline from St. Louis. And with that, they pushed the button.

—Anheuser-Busch board member Jim Forese

 

 

 

O
n Tuesday morning, after giving the news of Anheuser-Busch's capitulation a day to sink in, the victorious Brito arrived at headquarters in St. Louis to address the troops. InBev had held a global conference call on Monday to coincide with the announcement of the merger, and Brito spent more than an hour waxing poetic about the future and detailing his plans. That public showing, however, had been tailored for the media, analysts, and investors on Wall Street. He needed to keep Anheuser's engine fires burning by engaging staffers in St. Louis, and he felt that showing up in person would help.

InBev was hoping The Fourth would pitch in to keep his employees ' despair at bay, but his performance on the Monday call had suggested he was too distraught himself to be useful. When Brito turned the podium over to Anheuser's executives to see whether they had something to add, The Fourth remained completely silent, leaving Dave Peacock to fill the void with a few quick comments. August IV had prepared a series of remarks to make to his employees that day in St. Louis, but they were so dour that InBev's PR team edited them to inject them with some optimism. It was hard to blame The Fourth. He was being forced to act as the public face of a takeover he didn't support.

To honor Brito's visit and pay him the respect it felt he deserved as the soon-to-be new chief, Anheuser-Busch arranged for him to stay in a suite at the cushy Ritz-Carlton. The Ritz wasn't Brito's style, though, especially since he was just about to start indoctrinating Anheuser-Busch's staffers to InBev's frugal way of life. He had flown commercial into St. Louis from New York's LaGuardia Airport.

“He had someone call back and say, “No, no no, I've already reserved a room at such and such a place—like the Holiday Inn,” said one InBev insider. “I think that's when it probably, for the first time, hit home in St. Louis that things were going to be different.” Rather than hitching a town car or helicoptering in to Anheuser-Busch headquarters from his hotel on Tuesday morning, Brito accepted a ride from Dave Peacock.