Belgian brewer InBev will buy Anheuser-Busch (BUD) for about $52 billion.

The deal, announced late Sunday, ends a month-long wrangle for the American icon best known for Budweiser. The deal is expected to cut costs about $1.5 billion a year is sure to set off the usual wails about foreign companies buying up American industry.

“Together, Anheuser-Busch and InBev will be able to accomplish much more than each can on its own,” Carlos Brito, InBev’s chief executive officer, said in a prepared statement. “This combination will create a stronger, more competitive global company with an unrivaled worldwide brand portfolio and distribution network, with great potential for growth all over the world.”

The deal, subject to approval by shareholders and regulators, is expected to close by the end of the year. It would create the world largest brewer by volume. InBev makes Stella Artois and Beck’s.

InBev offered $65 a share on June 11, but Anheuser-Busch rejected the offer as “financially inadequate.” InBev increased the offer to $70, or about 11 times Anheuser-Busch’s estimated 2009 earnings.

InBev will change its name to Anheuser-Busch InBev. Anheuser-Busch will have two seats on the board of directors.

The combined company will have about $36 billion in annual sales and generate about 40% of its revenue in the United States. Company officials say the bigger company will allow it to negotiate better prices for suppliers, especially barley, hops and aluminum for cans.

InBev plans to make St. Louis its North American headquarters and will retain all 12 of Anheuser-Busch’s North American breweries.

InBev believes it can sell Budweiser into emerging markets, including Latin America, Asia and Eastern Europe. The combined company will be active in the world’s five top beer markets: China, Russia, Brazil, Germany and the United States.

After rejecting InBev’s initial offer, Anheuser-Bush presented a plan to increase earnings and cut costs in an effort to boost share price in the future. The stock has risen about 26% since May when the first reports of InBev’s planned bid for Anheuser-Busch were published.

Last week, the Belgian brewer said it would attempt to remove Anheuser-Busch’s board of directors to give shareholders a “direct voice” in the planned takeover. But Sunday’s agreement makes that issue moot.

The deal will be financed with $45 billion in debt. InBev has lined up financing through major banks, including Banco Santander, Bank of Tokyo, Barclays (BCS), BNP Paribas, Deutsche Bank, Fortis, ING Bank, JP Morgan Chase (JPM), Mizuho Corporate Bank and Royal Bank of Scotland. It has commitments for up to $9.8 billion in equity bridge financing.

In general, beer is a ho-hum, slow-growth industry.

Craft beer such as Boston Beer Company’s (SAM) has carved out a niche since it went public in 1996, but investors ask: Where’s the long-term growth? The stock recently fetched $42.25 a share. The 52-week range is $31 to $55.30.

Colorado’s Coors and Canadian brewer Molson merged in 2004 to form Molson Coors Brewing (TAP), swallowing rival Miller in 2007. Nevertheless, Anheuser-Busch has about half the U.S. beer market.

Beer sales are sluggish, but wine sales continue to grow in the United States, up 6.2% in dollar value in 2007 and 3% in total sales. The price increase underscores steady demand.

Well-known labels such as Beringer, Ravenswood, and R.H. Phillips rode the IPO mania of the 1990s to successful deals and have since been bought by larger companies. In 2004, Constellation Brands (STZ) bought Robert Mondavi for about $1.4 billion.