Shares of the largest U.S. brewer, Anheuser-Busch Companies Inc. (BUD), maker of such iconic brands as Budweiser and Bud Light, shot up more than 7% on Friday on news that the Belgium-based InBev NV was considering a $46 billion takeover bid.

European beermaker InBev is the world’s largest brewer. Its stable of beers includes such well-known names as Stella Artois, Beck’s and Brahma.

"The two companies would represent an excellent geographic fit," Wim Hoste, an analyst at KBC Securities, part of KBC Groep NV in Brussels, said in a telephone interview with Bloomberg News. "The black hole for InBev is the [United States]. Buying Anheuser-Busch would fill up the last major hole in their geographic portfolio."

Should the two brewers merge, the resultant entity would be a globally focused player that sends out 350 million hectoliters of beer annually and generates approximately $20 billion in annual revenue, MarketWatch reported.

Analysts are already expecting opposition from Anheuser’s fiercely independent President and Chief Executive Officer August Busch IV. But if Busch refuses to commence friendly talks, InBev would then be prepared to go straight to key shareholders with its $65 per share bid, The Financial Times’ Alphaville blog reported, citing unnamed sources.

Management opposition isn’t the only problem that could derail this merger, Craig Hutson, an analyst at GimmeCredit.com, said in a MarketWatch report.

"The cultures are vastly different," Hutson said. "Anheuser-Busch was founded by a family that has deep beer roots and a focus on building brands and treating its employees well. Inbev is a global amalgamation of acquisitions that is intently focused on reducing costs while incentivizing employees to drive higher profits."

Hutson wrote that, while a deal would be "a good geographic and product fit, we believe there are too many impediments."

Shares of Anheuser-Busch gained $4.03 each, or 7.66%, to close at $56.61 on Friday. The stock has traded between $45.55 and $58.00 in the past 52 weeks.

The proposed merger is the latest in a string of consolidations in the largely mature global beverage industry. In January, Carlsberg A/S and Heineken N.V. (HINKY) agreed to buy Scottish & Newcastle PLC for $15.4 billion. Late last year, British-owned SAB Miller PLC (OTC: SBMRY) and Canada’s Molson Coors Brewing Co. (TAP), agreed to merge their U.S. brewing operations.

If Anheuser-Busch is acquired by InBev, it will leave The Boston Beer Co. Inc. (SAM), maker of the popular Samuel Adams beer brand, as one of the last large domestic brewers that still has American ownership.

News and Related Story Links:

• Bloomberg News:
  Anheuser-Busch Surges on Report InBev May Make Bid

• MarketWatch:
  Anheuser-Busch rises on new report of takeover bid

• Reuters:
  InBev working on $46 bln Anheuser bid: source

• Money Morning:
  Third Time is the Charm for Carlsberg and Heineken

• Money Morning:
  Carlsberg and Heineken Close in on Scottish & Newcastle

• Money Morning:
  Thirsty for Profits? Ten Ways to Play the Worldwide Beer Market

Carlsberg A/S and Heineken NV agreed to buy Scottish & New Castle Plc last week for $15.4 billion.  For their money both companies will establish a firm presence in emerging markets.

Carlsberg will pay 54.5% of the total cost and Heineken will pick up the remainder.  Carlsberg is paying extra for the crown jewel of S&N’s assets, Baltic Beverages Holdings AB.

BBH is one of the fastest growing and most profitable breweries in the world. S&N and Carlsberg said earnings for BBH would rise 34% to 1.5 billion by 2010 as Russian demand for Baltika and Nevskoye brand beer surges.

Carlsberg is will also gain control of S&N’s operations in France, Greece, Vietnam, and China.

"The acquisition will make us the world’s fastest-growing brewer," Carlsberg Chief Executive Officer Jorgen Buhl Rasmussen said in a statement. The company estimates it will save approximately $256 million a year on production and distribution once the deal is finalized.

For its part Heineken gets operations in Ireland, Portugal, Finland, Belgium, India, the United Kingdom, and the United States. The company expects it will save $237 million through its acquisitions.

Global exposure comes at a cost, however, and the price tag was considerably large in this case. After being denied twice, Carlsberg and Heineken was forced to pay 800 pence a share in cash for the Edinbugh-based S&N. That’s 26% more than the closing price on Oct. 16, the day before the brewers first announced their intentions to acquire S&N. The original offer was 750 pence per share.

Speculation that the two companies are overpaying for S&N has driven their stock valuations significantly.  Heineken and Carlsberg stock has dropped about 12% and 20% respectively since that time.

Heineken and Carlsberg "probably paid a little bit too much," Andy Lynch of Schroders Investment Management in London told Bloomberg News.

News and Related Story Links:

• Money Morning:
  Carlsberg and Heineken Close in on Scottish & Newcastle

• Bloomberg:
  Carlsberg, Heineken Agree to Buy Scottish & Newcastle

Carlsberg A/S and Heineken N.V. (HINKY) have upped their offer to buy Scottish & Newcastle PLC for a fourth time, with the hopes of finally winning the company over.

Carlsberg and Heineken have raised their offer to $15.2 billion after being repeatedly turned away. The previous offer was $14.8 billion.

Scottish & Newcastle, whose brands include Foster’s lager and Strongbow cider, said it was confident in its future as an independent group. When news of the takeover attempt first broke, S&N said "the proposed break-up bid from Heineken and Carlsberg, the company’s joint venture partner in BBH (Baltic Beverages Holding), is unsolicited and unwelcome."

Carlsberg, the largest Nordic brewer, and Scottish & Newcastle are currently partners in the BBH joint venture. Baltic Beverages owns Russia’s largest brewer with a 38% market share, and other interests based in France and Greece.

If the takeover is successful, Carlsberg will take complete control of BBH and the French and Greek operations, while Heineken would get the U.K. and European brands. The statement didn’t specify who would get Scottish & Newcastle’s Asian assets.

In addition to advancing in Belgium and Portugal, a successful deal would give Heineken the top spot in the U.K., where it currently commands less than 1% of the market.

The takeover would also help the two companies to keep pace with SABMiller PLC and Molson Coors (TAP), two rivals that recently joined forces in a U.S.-focused joint venture. That brewery union could save as much as $500 million a year in manufacturing and shipping costs and provide the combined entity with 30% of the U.S. beer market.

News and Related Story Links:

• Money Morning:
  Thirsty for Profits? Ten Ways to Play the Worldwide Beer Market.

• Money Morning:
  Carlsberg, Heineken Eye Scottish & Newcastle

• MarketWatch:
  Carlsberg, Heineken raise S&N offer again