InBev, the owner of Stella Artois and Beck's beer, toasted victory yesterday in its battle to acquire Anheuser-Busch (AB) after raising its bid to $52 billion (£26.1 billion) and offering a boardroom seat to August Busch IV, the chief executive of the brewer that makes Budweiser.

Inbev, itself spawned from the merger four years ago of Interbrew, of Belgium, and AmBev, of Brazil, vowed to turn Budweiser - the self-styled King of Beers - into a “global flagship brand” and said that the deal should yield annual cost synergies of at least $1.5 billion within three years.

The figure, higher than expected, immediately raised the spectre of big job losses, although InBev reiterated its promise not to close any of AB's 12 American breweries. Analysts said, however, that Inbev's existing presence in Britain made it unlikely that it would retain the Budweiser Stag Brewery in Mortlake, southwest London.

InBev sealed the deal over the weekend after lifting its offer from $65 per share to $70. In a crucial move, August Busch IV, the chief executive of AB and a descendant of the company's founder, withdrew his opposition to InBev's advances and gave his blessing to the improved offer, in return for one of two non-executive positions for AB directors on the board of the enlarged company.

The merger will create 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. Inbev, which is to change its name to Anheuser-Busch InBev, said that it did not anticipate any significant regulatory issues and expected to complete the deal by the end of the year. It said that although both companies had a strong presence in China, they were complementary, with InBev's business being based in the south east and AB's main strength being in the north east.

InBev has secured debt funding from a consortium of banks, including Barclays Capital and Royal Bank of Scotland, totalling $45 billion. The package includes a bridging loan of $7 billion that will be repaid after the sale of non-core assets, expected to comprise mainly AB's theme park and packaging businesses. Including the assumption of AB's debt of $9.1 billion, the offer is worth just over $60 billion.

The start of talks on Friday came after a month of increasingly antagonistic relations. AB rejected last month's opening $47 billion offer as “financially inadequate”, prompting InBev to take legal steps to remove the American brewer's entire board of 13 directors. AB responded by threatening to take legal action against its suitor, claiming that it had launched the bid based on “numerous false and misleading statements” about how it would be financed and how the company would be run after the acquisition.

Mr Busch had vowed to fend off InBev's attentions. However, analysts said that with the Busch family speaking for less than 4 per cent of the shares, Mr Busch could have left himself open to legal action from other shareholders, such as Warren Buffett, who speaks for 5 per cent of the shares.

Mr Busch said that the move to sell had been an emotional decision and admitted: “The process was at times difficult for all concerned.” In a veiled threat to his counterpart, he said he was sure that Carlos Brito, the chief executive of Inbev, was “a man of his word” and was confident that he would “honour his publicly made commitments” about the future of the AB business.

The companies already work together in America under an agreement whereby the US brewer distributes some of its Belgian rival's brands. It is not clear if Inbev will take over AB's 50 per cent stake in Grupo Modelo, the Mexican brewer behind the Corona brand. Mr Brito said that he would seek early talks with Modelo.

Buschwhacked

InBev, based in Leuven, Belgium, traces its origins back to 1366. Today’s company, created through the merger of Interbrew, of Belgium, and AmBev, of Brazil, has more than 200 brands, including Stella Artois, Beck’s, Leffe, Hoegaarden, Skol, Quilmes and Jupiler. The Euronext-listed group employs 89,000 people in 30 countries across the Americas, Europe and Asia-Pacific.

Anheuser-Busch (AB) started life in 1860 when Eberhard Anheuser acquired the Bavarian brewery in St Louis, Missouri. His son-in-law Adolphus Busch, a German immigrant, joined the business in 1864. It is America’s biggest brewer, with 48.5 per cent of the market. Budweiser and Bud Light are the world’s biggest beer brands. It also owns stakes in Modelo, the Mexican brewer, and Tsingtao, the Chinese beer-maker.

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