ST. LOUIS - Anheuser-Busch Cos. Inc. said Thursday that billionaire Warren Buffett's Berkshire Hathaway Inc. has acquired a "significant" stake in the nation's largest beermaker. The brewer's shares soared more than 6 percent on the news.
St. Louis-based Anheuser-Busch did not reveal how much of a stake Buffett's holding company bought, saying only that the brewer learned recently Berkshire Hathaway "has become a significant shareholder" it welcomes.
An Anheuser-Busch spokesman said that company was "not in a position to go beyond what's in the news release."
St. Louis-based Anheuser-Busch did not reveal how much of a stake Buffett's holding company bought, saying only that the brewer learned recently Berkshire Hathaway "has become a significant shareholder" it welcomes.
An Anheuser-Busch spokesman said that company was "not in a position to go beyond what's in the news release."
Analysts said Berkshire's interest in Anheuser-Busch could be viewed as a vote of confidence by Buffett in the brewer's long-term potential despite its recent struggles as the U.S. beer business has softened.
Earlier this month, Anheuser-Busch cut its earnings forecast for 2005 for the second time this year, citing weaker-than-expected U.S. beer volume in the first quarter.
"When the near-term prospects are flatter than day-old beer, this is wonderful" for Anheuser-Busch, Juli Niemann, a St. Louis-based analyst with RT Jones Capital Equities, said of Buffett's stake. "The consensus is that he always buys good value."
In recent months, Niemann said, Buffett increasingly has become bearish on the market and more defensive in his holdings, perhaps tapping a stake in the nation's leading brewer because "he wants something that's not going to give him an upset stomach."
"They know brewing and they stick to brewing," she said, attributing Anheuser-Busch's stock spike Thursday to what Wall Street often calls the "Buffett blessing." "I would think at this point that Anheuser-Busch is sitting there smiling, feeling wonderfully self-validated."
Buffett announced in March that he would be on the prowl this year for new companies after lamenting last year's failure to make multibillion dollar acquisitions that would boost Berkshire's earnings. In his 40th annual report, the man known as the "Oracle of Omaha" expressed dismay that he failed to buy more companies in 2004.
Berkshire posted a gain in net worth of $8.3 billion in 2004, which increased the per-share book value — assets minus liabilities — by 10.5 percent. That was keeping nearly in line with the S&P 500, which grew by 10.9 percent.
In 2003, the company saw a 21 percent increase in book value while the S&P 500 grew by 28.7 percent.
Buffett has made himself the world's second richest man — and many of his stockholders into millionaires — by buying companies in a wide array of industries, including insurance, furniture, restaurants, candy and newspapers.
On the Net:
Anheuser-Busch, http://www.anheuser-busch.com
Berkshire Hathaway Inc., http://www.berkshirehathaway.com
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