ST. LOUIS --Anheuser-Busch Cos. Inc. said billionaire Warren Buffett's Berkshire Hathaway Inc. has acquired a significant stake in the nation's largest beer maker. The brewer's shares soared more than 6% on the news, according to the Associated Press.
A-B did not reveal how much of a stake Buffett's holding company bought, saying only that the St. Louis-based brewer learned recently Berkshire Hathaway has become a significant shareholder it welcomes. An A-B spokesperson said that company was not in a position to go beyond what's in the news release.
Shares of Anheuser-Busch rose $2.94, or 6.5%, to close at $48.04 Thursday on the New York Stock Exchange (NYSE), where they have traded in the range of $44.85 to $54.74 over the past year. Shares of Berkshire rose $1,100, or 1.3%, to close at $83,800 on the NYSE, near the lower end of their 52-week range of $81,150 to $93,700.
Analysts said Berkshire's interest in A-B 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, A-B 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 A-B, 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 A-B's stock spike Thursday to what Wall Street often calls the Buffett blessing. She added, I would think at this point that [A-B] 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 Hathaway bought convenience store distribution giant McLane Co. in May 2003.
Buffett has made himself the world's second richest manand many of his stockholders into millionairesby buying companies in a wide array of industries, including insurance, furniture, restaurants, candy and newspapers.
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