InBev, the Belgian maker of Stella Artois and Beck's beers, is expected to raise its offer for Anheuser-Busch (AB) to as much as $50 billion (£25.6 billion) in an attempt to persuade the American brewer's board to recommend a deal.

Analysts believe that the Budweiser brewer will reject the opening gambit of $65 a share but will be forced by institutional shareholders, including Warren Buffett, to start talks if the bid is raised closer to $70.

The $65-a-share offer values AB at $47.5 billion, or almost $57 billion including net debt of $9.1 billion. InBev, which is advised by Lazard and JPMorgan, said that it had lined up $40 billion of debt funding from Banco Santander, BNP Paribas, Deutsche Bank, Fortis, ING, JPMorgan and Royal Bank of Scotland. The balance would come from asset disposals and equity financing.

The founding Busch family speaks for less than 4 per cent of AB shares but controls the boardroom. August Busch IV, the chief executive, said last year that the 156-year-old company would not be taken over “on my watch”. But industry observers believe that, with some members of the Busch family having expressed a willingness to entertain an approach, the board will find it hard to rebuff an improved offer. Lawyers said AB could leave itself open to litigation from shareholders if it rejected a reasonable offer.

Carlos Brito, chief executive of InBev, sought to play down the suggestion that the group could raise its offer: “We think this is a full and fair price. We think it's the right price.”

He also rejected claims that buying AB was an attempt to solve the slowdown in growth reported by InBev in the first quarter. “People who say that don't know us,” he said. “We are here for the long term. We have had tough quarters before.”

Mr Brito added that a tie-up would enable both parties to achieve more than they could separately and reassured workers there would be no closures of AB breweries.

In an attempt to win over the Busch family, InBev said it would turn Budweiser into its flagship beer and that the name of the combined company would evoke the Anheuser-Busch heritage, although no suggestion has been finalised.

Some AB directors would be invited to join the board and its headquarters in St Louis, Missouri, would become the home of the enlarged group's North American division.

AB responded by saying that it would “evaluate the proposal carefully and in the context of all relevant factors, including Anheuser-Busch's long-term strategic plan”.

It said the board was mindful of its fiduciary duty to all stockholders. However, investors are unlikely to be pleased by the tone of an internal memo to employees, in which Mr Busch suggested that it could be “several months” before the company reached a decision “due to necessary corporate governance, legal and regulatory steps that must be followed”.

InBev wants AB for its 48.5 per cent share of the American beer market, the world's largest in terms of profits. It would also help it to boost its presence in China, the largest beer market by volume.

InBev said the combined company would be one of the top five consumer products companies in the world, with global beer volumes of 460 million hectolitres, net sales of $36.4 billion and underlying earnings of $10.7 billion. Analysts estimate the synergies at between $900 million and $1.3 billion.

The proposed deal has caused a stir in AB's home town of St Louis. Matt Blunt, the Republican Governor of Missouri, has directed the Missouri Department of Economic Development to see if there was a way to stop it. “The offer is deeply troubling to me,” he said.

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