This article first appeared in the St. Louis Beacon, Oct. 26, 2010 - When Julie MacIntosh set out to write "Dethroning the King," her book about the sale of Anheuser-Busch to InBev, she was worried about how she would fit in with her sources, "as a young(ish) pregnant woman writing a book about the hostile takeover of a male-dominated brewer."
Now, she says, she need not have worried. She found enough people who had worked at or with the iconic St. Louis company who were more than willing to sit down with her and tell what they knew about a corporation whose public image of camaraderie and good times often clashed with an internal culture of secrecy, intimidation and distrust.
What she found is a classic drama on two levels, chronicled in a book whose title recalls echoes of Hamlet, Macbeth and Lear.
One is between a father and son, August A. Busch III and August IV. When the father stepped aside and turned the company's throne over to his son, he did not relinquish control completely. As MacIntosh writes of the new CEO, "it became apparent that he was operating with one hand tied behind his back, and his own father had fastened the knot."
Whether August III was deliberately trying to undermine his son's authority -- as III had done in a much more forceful way when he deposed his own father, August A. Busch Jr., in a coup many years earlier -- is hard to say. But the overwhelming impression from MacIntosh is that when InBev approached A-B with its takeover offer, August IV wasn't in a position to fend it off.
That led to the second clash, one of the extravagant, quintessentially American culture of Anheuser-Busch vs. the more cost-conscious, globally aware approach of InBev.
Two examples cited by MacIntosh sum up that dichotomy well.
Life in the A-B "free-spending bubble" meant travel on corporate jets and stays in the finest hotels, like the Pierre on New York's Fifth Avenue. When InBev executives traveled to New York, MacIntosh notes, they were more likely to be quartered at the kind of hotel where "it made sense to check behind the headboard for bedbugs, just in case."
At meetings, she quotes one Anheuser-Busch board member as saying, the brewer "brought a guy with a laptop, a guy with a spare laptop, and a guy with a spare for the spare laptop ... It was just crazy expensive, whereas MillerCoors' Tom Long would just walk up by himself with a thumb drive. That kind of culture was ripe for the picking."
Picked it was, in an astonishingly brief whirl of dealing that occurred just as the economy began to collapse in the summer of 2008. Had the takeover come a few months earlier, McIntosh notes, A-B may have been able to fend it off. Had it come a few months later, InBev may have found credit markets had dried up to the point it would not have had the cash to close the deal.
Since she has moved to California, McIntosh has acquired an agent and is in discussions to turn the book into a movie. Speculation on casting led to names like Robert Duvall as August III, Edward Norton or Stephen Moyer of "True Blood" as August IV and Javier Bardem as InBev's Carlos Brito.
MacIntosh, who comes to St. Louis this week to discuss the book, talked to the Beacon Tuesday morning.
So much of the book concentrates on the relationship between August Busch III and his son, August IV. What did you conclude about their dealings with each other?
MacIntosh: I think it's clear that August III undermined his son. I think most of the board members even agreed. The question is whether he did it deliberately or not, and I honestly think what August III thought was most important was the performance of the company. There may have been a point where he thought August IV was the best candidate to succeed him, but as the months passed, and his son didn't live up to whatever his expectations were, he tried to backtrack and reassert control as much as possible.
I think the pathos between August III and August IV was completely important. When August III knew things were going wrong, he was able to summon the gumption of his father. He had that type of character. He wasn't seeking the approval of his father, like August IV did. The fourth always wanted his father to approve of him.
How easy was it to get people who were close to the company to open up about what must have been a traumatic experience, having an iconic American company taken over by an outsider?
MacIntosh: I was very pleasantly surprised. Part of that is because a lot of the company has disbanded, so I didn't have to operate within the structure of regular checks and balances. I also tried to avoid that as much as possibly by going directly to the people themselves, and I think the people appreciated that.
Part of it was that people had sat on this information for so long. They had thought about it a lot and mulled it over. It became cathartic. In St. Louis, when people get together, they talk about it, so it might have been refreshing to talk about it to someone else.
They saw me as another person who was interested in their story, not as someone with a huge organization behind her. It didn't take me that long. The old Anheuser-Busch was essentially dead and buried, and people thought this was their one chance to get the real story out there. I really felt people had a lot to get off their chest. I wasn't just after dirt. I just tried to tell the story.
When the takeover battle was brewing, you mentioned that you thought the reaction of elected officials devolved into "cheesy politico-speak," particularly Sen. Christopher Bond's response: "My Missouri constituents say, this Bud's not for you." Were you surprised that with all of its clout, A-B didn't get more help from Washington?
MacIntosh: There are two parts to that. I am surprised that more politicians didn't try to rally against the takeover and support American interests. That is an easy political case. It should be a cakewalk for anyone seeking re-election. But I don't think that logically, it made a lot of sense, so many politicians probably felt it wasn't their battle. There weren't any arguments involving a national security interest or any kind of national interest. I don't think that matters enough.
But that wouldn't mean that politicians wouldn't rally behind them. What happened was that it was almost impossible for them to ignore the bigger problems their constituents were having -- they were losing their homes, they were losing their jobs, there were all the things going on with the economy at the time. So it was pretty tough to put those issues on the shelf and focus on the brewer of Budweiser.
The clash of cultures between InBev and A-B, plus the timing of the deal, make it improbable in many ways. How do you think it has worked out so far?
MacIntosh: In mergers and acquisitions, you always look at the culture. In technology, that is where a lot of deals have gone awry. If you want to be completely ruthless, you could wipe out all the people who endorsed the old culture and completely implement a new one. You don't have a culture clash if you don't have people clashing. At InBev, there has been a decent amount of attrition, and a lot of people who might have made the culture shift most difficult were people like high-ranking executives who mostly have left.
InBev is not a company that was well-known, even abroad. Although it had a good reputation, it did not have a reputation with a rich history. They knew it would be an uphill battle. There is a huge disconnect in terms of the historical culture, and I thought that would be one of the easy things to build the book around. I ended up discovering that it was not just my perception of that. The people in InBev realized that was a difficulty they were facing, and that was one of the reasons they made so many promises to Anheuser-Busch, like to keep the Busch name on the stadium, to keep Grant's Farm and to keep the name Anheuser-Busch in the company name.
There haven't been any huge surprises. Even finding out that they would be charging for appearances by the Clydesdales isn't surprising, because InBev is so cost-conscious. If there are surprises, they will come in the next couple of years, as they try to deal with Budweiser's sliding sales in the U.S. They will have to try to get more creative about that.
As I was reading of the relationship between father and son, and particularly about August IV's youthful exploits, it struck me that there are parallels here between another pair of Bushes, George and George W. Did you see that as well?
MacIntosh: That was something that several people mentioned to me. I am certainly not an expert in the Bush family, but from a voter's perspective, I would think Bush Sr., just like August III, was probably the more politically astute of the two.
It's difficult to have the second generation take over, whether it is politics or business. You are always trying to fill your father's shoes. It's difficult to begin with, and if you are not as adept as your father, it is even more difficult. Here you have sons who were raised with astronomical sums of money, and that can also make it difficult to keep your bearings.