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InBev clarifies Anheuser-Busch offer after Modelo rumours

Published:  23 July, 2008

Stella Artois owner InBev has clarified its offer for Budweiser owner Anheuser-Busch with a second letter of intent to its board of directors.

The letter follows press reports Anheuser-Busch is considering a merger with Grupo Modelo to build on its 50% non-controlling stake in the company potentially making it too big for InBev to purchase.

The open letter from Carlos Brito, InBev CEO, read:

"We are writing to clarify certain aspects of our proposal of June 11th.

"As we indicated in our letter, we are committed to entering into a constructive dialogue with you to achieve a friendly combination of our two companies. We also stated that we have the greatest respect for Grupo Modelo and its management and look forward to the opportunity to work with them to explore possible ways to expand the availability of the Grupo Modelo brands outside of North America.

"We have read the recent press reports suggesting that you may have approached Grupo Modelo regarding a possible transaction between Anheuser- Busch and Grupo Modelo or affiliated entities. In light of the reports, we believe it is important for you and your Board to understand that our proposal to combine with Anheuser-Busch by means of acquiring all Anheuser-Busch outstanding shares for $65 per share in cash is made on the basis of Anheuser- Busch's current assets, business and capital structure. Accordingly, we would expect that prior to proceeding with any alternative transaction, especially if your shareholders will not be given the opportunity to vote on it, you would first fully explore our offer and the potential adverse consequences any such transaction could have on the ability of your shareholders to receive our premium offer.

"We should also add that, having carefully considered the merits of our proposed combination, it is our strong belief that no alternative transaction that you could effectuate would create more value for your shareholders than the $65 per share in cash that we are offering. We are convinced that your shareholders would reach the same conclusion."