International Economic Law and Policy Blog

Fear of Foreign Beer

There is talk of Anheuser-Busch being bought:

Anheuser-Busch Cos., the nation's biggest brewery, received a $46 billion buyout offer Wednesday from a Belgian brewer that might be too good to refuse.

The maker of Budweiser beer disclosed late Wednesday that InBev SA, whose brands include Beck's and Stella Artois, delivered an unsolicited all-cash bid of $65 a share. It's unclear whether senior Anheuser-Busch executives think the deal makes sense, but shareholders may be drawn to the offer that represents a sizable premium over the company's closing price of $58.35 Wednesday.

It's not too shocking to hear concern expressed about Budweiser being taken over by a non-American company, although the extent of the criticism was a bit surprising to me.  The Governor of Missouri (where the company is based) had this to say:

  “Anheuser-Busch is a great Missouri company, a great employer, a great corporate citizen and the maker of great products that are enjoyed in Missouri and around the world.

   “I am strongly opposed to the sale of Anheuser-Busch and today’s offer to purchase the company is deeply troubling to me.  I have said that while I am supportive of action to prevent the sale there is no immediate tool available at the state level to block it.

   “I have directed the Department of Economic Development to explore every option and any opportunity we may have at the state level to help keep Anheuser-Busch where it belongs - in St. Louis, Missouri.”

And some people are beyond concerned, moving to "up in arms."  From a web site devoted to stopping the purchase (http://saveab.com/)

My fellow Americans,

Like baseball, apple pie and ice cold beer (wrapped in a red, white and blue label), Anheuser-Busch is an American original. Founded in St. Louis, Missouri, AB represents the spirit of our country, giving millions of Americans the "pursuit of happiness" through its high quality products and thousands of great paying jobs. Generations of Americans have grown up loving AB products and have appreciated its committment to our communities.

Now, our city, our state, our nation and our workers are being threatened with the loss of A-B to foreign investors.

With your help we can fight the foreign invasion of A-B. We will fight to protect this American treasure. We will take to the Internet, to the streets, to the marble halls of our capitals, whatever it takes to stop the invasion.

On the other hand, someone at the WSJ takes a contrary view:

Free trade and globalization are in the national interest. So is the sale of Anheuser-Busch to InBev.

A Survey of Foreign Investment Fears

A reader points me to the following article on fears of foreign investment in Canada:

In an unprecedented move, the federal government has blocked the $1.3-billion sale of the space technology division of Vancouver-based MacDonald, Dettwiler and Associates to a U.S. firm.

In a letter this week to Alliant Techsystems Inc. (ATK), Industry Minister Jim Prentice said he is "not satisfied" the sale will be a net benefit for Canada.

Alliant has been given 30 days to state its case to win approval for the sale.

After question period Thursday, Prentice told reporters he was "very confident" of his decision.

"It's a very significant step under the Investment Canada regime of saying we don't see net benefits to Canada in this transaction."

By coincidence, I came across a couple articles on what's going in other countries.

In the U.S., Dave Zaring over at the Conglomerate takes a look at CFIUS:

I wanted to have a look at these matters to see if there were any opinions that could establish in more detail what criteria CFIUS used when evaluating foreign acquisitions. Unfortunately it is not to be. A Treasury Department employee told me that CFIUS does not publish anything, and interprets itself not to be subject to FOIA.

And in the Economist, there is some discussion of Japan and the EU in relation to the energy industry:

“J-POWER is different,” says Akira Amari, Japan's trade minister, justifying his unease over a request by The Children's Investment Fund (TCI), a British activist shareholder group, to double its stake in Japan's formerly state-owned electricity wholesaler. Although Japan is open to foreign investment, says Mr Amari, the company deserves special treatment because of its strategic importance: its transmission lines link Japan's four main islands and it is building a nuclear reactor.

Japan is particularly sensitive about investments in energy, because the country is devoid of oil, gas, uranium and other fuels, and so must import almost all its needs. Officials fear that foreign investors might put profits before the long-term planning and investment this natural deficit demands. TCI, after all, has called on J-Power to pay a higher dividend and take on more debt.

Japan is not alone in this view. The European Commission is struggling to persuade the governments of European Union countries that they should allow foreigners to buy their national energy champions (although the British government seems to have no objection to selling its 35% stake in British Energy, a nuclear-power firm, to the various foreign suitors that have been lining up in recent days).