Short Paper: Anheuser-Busch Valuation Discussion
Use this information to assess the amount In-Bev paid for the brands owned by AB. Going back to the article and discussion about Budweiser and InBev, do you think that InBev made a fair offer for Budweiser? What did they actually get for their money
In your discussion, consider whether you think that InBev paid a 35% premium for the brand, more than 35% or less than 35%. Does the 35% number seem fair and accurate to you, or high or low? On what are you basing your thinking?
Write a short paper that answers these questions. Cite all sources.
There is no significant discussion in the InBev article about the tangible assets in play, but Simon and Sullivan’s Measured Brand Equity for Food Product Companies (an alternative to Interbrand’s valuation method) estimates that AB’s brand equity is approximately 35% of the replacement value. That means that should a company need to introduce a new brand to replace the old, its value would diminish by 35%, which is the value of the brand equity. See what you can find about Anheuser-Busch’s balance sheet at the time of the buyout.