Anheuser-Busch's Troubled Brew

Within the clubby confines of the beer industry, it's an odd coupling, not unlike, say, Angelina Jolie and Billy Bob Thornton or Lyle Lovett and Julia Roberts. InBev (INTB) and Anheuser-Busch (BUD) —which on July 13 succumbed to InBev's hostile bid and agreed to be acquired for $52 billion—couldn't be more different.

At Belgium-based InBev, Chief Executive Carlos Brito and his team have steamrolled their way through a series of acquisitions that prompted one analyst to call them "machete-wielding investment bankers." To pay for those deals, Brito cuts costs to the bone: The native of Brazil orders his executives to fly coach on most flights, is stinting with standard industry perks like company cars and free beer, and encourages employees to photocopy on both sides of each sheet of paper.

By contrast, InBev's new bride, Anheuser-Busch, comes to the marriage with expensive tastes. The company has spent lavishly on New Media ventures. There was ESPN in the 1970s and more recently the ill-fated BudTV.com. Longtime CEO August Busch III routinely made the 10-mile commute to work by helicopter and once mused whether to buy a castle in Europe for a commercial shoot. His successor and son, August Busch IV, continues the tradition: Employees enjoy free admission to the company's theme parks and get two free cases of beer each month. "I think even the Clydesdales [stabled at Anheuser-Busch headquarters] get better treatment than your average InBev employee," jokes one industry consultant. Executives at Anheuser-Busch and InBev declined comment for this story.

Steely Leadership

Brito clearly has a lot riding on his ability to mesh these disparate cultures and realize his vision of creating the "best beer company in a better world," as he put it in a conference call announcing the deal. This 48-year-old executive is known more as a steely operator than motivator, having made his name by developing systems that measured the productivity of everything from the company's breweries to its sales force. In a speech to Stanford MBA students last February, Brito recalled how he once chafed when given a promotion that included oversight of human resources and technology: "For me, sales was everything," he recalled, while a "touch-feely" concept like leadership "was for poets."

To make his latest deal work, Brito will need all of those tough qualities and more. Of the $52 billion he's paying for Anheuser-Busch, $45 billion is borrowed. That means the combined debt burden for the renamed Anheuser-Busch InBev will work out to a hefty 12.4 times the company's combined cash flow, giving Brito little margin for error.

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