BeerPulse

Originally published back in August but some interesting food for thought from beverage industry consultant, John Conlin…and one would think this needs to happen if AB InBev buys SABMiller given U.S. antitrust issues the company would be facing…

Which returns us to the first point in this blog… that ABI will sooner than later divest themselves of the US market.  So you might ask why would they be willing to sell their Cash Cow?  To which I’d respond, why wouldn’t they if the price was right?  A Cash Cow is a wonderful thing but it has little upside potential… remember it already has high market share in a low growth market… where is there left to go?  Many high share ABI distributors ask themselves the same question.

For ABI, an international company, where to go is where the action is… like China, India, other places around the world.  And again, if the price is right why not get the heck out of Dodge?  And remember, because the Cash Cow’s cash flows are relatively steady, it is fairly easy to discount these stable future cash flows back to a present value… if the offer is greater than this, Katie bar the door.

via Conlin Beverage Consulting, Inc.: ABI to sell off US operations?.