InBev to expand Bud, job cuts

ST. LOUIS - Expect "Blue Ocean" to get deeper and Budweiser's reach to get wider.

In a conference call Monday morning, victorious executives from InBev laid out their plans to expand cost-cutting already underway at Anheuser-Busch Companies, and to build the world's dominant brewer around its new flagship brand: Budweiser.

InBev Chief Executive Carlos Brito, hours removed from the announcement of a $52 billion deal to buy the iconic St. Louis brewer, told analysts Monday morning the merged company, to be known as Anheuser-Busch InBev, will be the leading provider of beer in the world's five biggest beer markets and the third-largest consumer products company in the world. It will be 62 percent larger in terms of revenue than its next-largest brewing rival, SABMiller.

Brito said Budweiser has unlocked potential in countries where the beer is not widely available, because even there, drinkers are aware of the beer -- thanks to Anheuser-Busch's globe-spanning advertising of the World Cup and Olympics.

"In a more competitive global market," he said, "this transaction will create a stronger company."

The deal will open new markets for Budweiser, which InBev will push in 19 countries from Brazil to Ukraine where it is strong but A-B is not.

And, he pledged, InBev takes the same "no-compromise" position toward quality that Anheuser does.

St. Louis will remain the company's North American headquarters, Brito said. He pledged to maintain the company's heritage, such as Grant's Farm and Clydesdales.

But changes are inevitable, and will begin with a deeper cost-cutting plan than the one A-B unveiled last month, when it was still trying to fend off InBev.

That plan -- known as "Blue Ocean" -- to cut $1 billion in expenses over two years, will be expanded to a $1.5 billion effort over three. That means planned buyouts of up to 1,300 salaried employees will likely continue. "Elimination of corporate overlapping functions" will likely lead to some job losses at A-B's corporate headquarters in St. Louis.

In a brief statement at the start of the call, Anheuser Chief Executive August Busch IV stressed that the deal was "friendly" and the best move for his company's shareholders.

Busch will not have an executive role with the new company but will take a seat on InBev's board, as will one other current or former member of A-B's board. Brito said he hopes to close the deal by the end of the year.