Buffett Could Make $600 Million on InBev-Bud

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Brew Blog

Buffett became “significant shareholder” in April 2005.

Warren Buffett, whose Berkshire Hathaway is Anheuser-Busch’s second-biggest shareholder, so far has been silent on InBev’s bid for A-B.

But a Bloomberg story suggests that Buffett might have 600 million reasons for supporting it.

From Bloomberg:

Berkshire Hathaway Inc., the investment company controlled by billionaire Warren Buffett, may bank a $600 million profit if InBev NV succeeds in its $46.3 billion takeover of Budweiser-maker Anheuser-Busch Cos. …

“Here’s the payout right up front after a very short incubation period as far as Berkshire is concerned,” said Frank Betz, a partner at Carret Zane Capital Management, which oversees $800 million including Berkshire and Anheuser-Busch shares in Warren, New Jersey. “I think he would go along with this, especially at the premium.”

While Buffett has been quiet, the Belgian newspaper De Standaard has reported that he backs the deal. And he is known to be on good terms with InBev board member Jorge Paulo Lemann. The two served on the board of Gillette (which sold to Procter & Gamble). From the Bloomberg story:

Buffett didn’t respond to repeated requests for comment on InBev’s offer, other than to say through his assistant Debbie Bosanek that InBev board member and fellow billionaire Jorge Paulo Lemann is a “good friend.” Lemann is one of a trio of Brazilian investment bankers who built Sao Paulo-based Cia. de Bebidas das Americas, or AmBev, which was sold to Interbrew SA in 2004 to form InBev.

Berkshire Hathaway, disclosed in April 2005 as a “significant shareholder” in A-B, owns 35.56 million shares for a 5 percent stake as of March 31, according to the Bloomberg story.

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