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Quick Hits: InBev Still Thirsty For Bud?

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Brief scrutiny of today's headlines.

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InBev expects to close its $52 billion takeover of Anheuser-Busch (BUD) by the end of the year, but the deal may have to be renegotiated.

Anheuser-Busch's shares closed Thursday at $58.13, well below the $70 deal price. However, the shares are up about 10% from where they were in May before merger chatter sent them higher. The companies struck a deal in July to create the world's largest brewer.

Trouble in the banking industry and worldwide market volatility has forced the Belgian brewer to postpone a $13.4 billion rights issue planned as part of the deal.

InBev planned to take on $45 billion in debt to finance the deal. It lined up the first round of financing in August, but syndicating the second round appears to be moving more slowly amid the credit crunch.

These factors could combine to delay the deal, despite InBev's insistence that it's on track.

Other deals have been renegotiated or delayed. In May, private equity buyers of Clear Channel Communications got a lower price after debt financing costs rose and lenders balked – and that was before the market downturn in September. Altria (MO) announced earlier this month that it may delay its purchase of UST (UST) until next year.

InBev could take a similar tack and renegotiate the deal or some of the price could be paid in InBev shares rather than cash.

So far, the market is betting that the deal will be completed. If the deal were doomed, Anheuser-Busch's stock would probably drop into the mid-$30s range.

InBev is best known for Stella Artois and Beck's; Anheuser, for Budweiser and Michelob. Right now, it looks like a tall, cool one is on tap, despite the market's manic swings.
No positions in stocks mentioned.
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