Anheuser-Busch takes equity stake in Antarctica, a leading beverage company in Brazil.

ST. LOUIS, Mo.--(BUSINESS WIRE)--Feb. 22, 1995--The international subsidiary of Anheuser-Busch Companies, Inc. (NYSE: BUD) the world's largest brewer and maker of Budweiser, the world's number- one selling beer brand, today announced it will purchase an equity stake and form a strategic partnership with Companhia Antarctica Paulista, one of Brazil's largest beverage makers and whose flagship beer brand, Antarctica, has regained the leadership position in the Brazilian beer market.

The deal also calls for establishment of an Anheuser-Busch controlled marketing and distribution joint venture between the two brewers to support sales of Budweiser in Brazil. The joint venture will contract local production of Budweiser from Antarctica.

The deal makes Anheuser-Busch the first American brewer to hold an equity stake in the important Brazilian beer market, which is the largest in Latin America and the sixth-largest in the world. Last year the Brazilian beer market grew by more than 15 percent. Its potential for future growth makes it one of the most important global beer markets.

Anheuser-Busch will make an initial investment of 10 percent in a new Antarctica subsidiary that consolidates all of Antarctica's holdings in affiliated companies and that controls 75 percent of Antarctica's operations. Anheuser-Busch will have an option to increase its investment to approximately 30 percent in the new company in the future. The amount of the initial investment will be approximately $105 million.

The investment will establish a partnership that gives Antarctica a seat on the board of Anheuser-Busch International, Inc. and gives Anheuser-Busch International proportionate representation on the board of the new Antarctica subsidiary. The two brewers will also explore joint distribution opportunities in other parts of the world. Anheuser-Busch and Antarctica will exchange executives to share best practices in areas such as brewing, marketing, sales, distribution, finance and planning. As a result, Antarctica will have ready access to Anheuser-Busch's knowledge and experience in areas such as the development and introduction of new brands, non-returnable containers and mass merchandising techniques, all important as the Brazilian beer industry expands.

"This partnership is an important first step in our international strategy for gaining a significant participation in the fast-growing South American beer market," said Jack H. Purnell, chairman and chief executive officer of Anheuser-Busch International, Inc. "We have found the best partner for this market in Antarctica, which has an excellent reputation, strong financial performance and more than 100 years of experience in the Brazilian beer and soft drink markets."

The second component of the partnership will be establishment of a joint venture that will market and distribute Budweiser in Brazil. The joint venture will be 51 percent owned and controlled by Anheuser- Busch, 49 percent by Antarctica. Antarctica's high-quality production plants will produce Budweiser according to the brand's quality requirements. Local sourcing of Budweiser will allow more competitive pricing and increased sales of the brand in Brazil. Budweiser will be distributed through Antarctica's network of nearly 1,000 Brazilian wholesalers. Budweiser has already achieved a distribution foothold in the Brazilian beer market over the past four years in cooperation with its distributor Arisco.

"The combined strengths of Anheuser-Busch and Antarctica in the booming Brazilian environment will lead to increased sales for both companies' products, resulting in a more competitive beer market, which benefits consumers, suppliers and distributors in Brazil over the long term," said Jose H.A. Gracioso, member of the board of directors of the Antarctica Group.

"Anheuser-Busch has years of experience in product and marketing innovation in the highly competitive U.S. beer market. This will benefit sales of our beers and soft drinks in Brazil and abroad, where we intend to intensify our growth strategy," said Gracioso.

The proposed transaction remains subject to completion of due diligence and definitive documentation, receipt of necessary regulatory approvals and satisfaction of other customary conditions. The transaction is scheduled to close in the second quarter of 1995. The partnership with Antarctica follows a number of other international business ventures by Anheuser-Busch recently. In June, the company signed a letter of intent to purchase an 80 percent ownership interest in a brewery joint venture in Wuhan, China. In 1993, Anheuser-Busch purchased a 17.7 percent investment in Grupo Modelo, the leading brewer in Mexico; purchased a 5 percent investment in Tsingtao, the leading brewer in China; and formed a marketing, sales and distribution joint venture with the Kirin Brewery, the largest brewer in Japan. Additionally, the company has recently strengthened its brand development activities in India, Central America and Spain.

Current per capita beer consumption in Brazil is estimated to be 40 liters per year (compared to 90 liters per year in the United States) and is expected to increase significantly as the economy stabilizes, inflation decreases and consumer purchasing power increases. Brazil is recognized by analysts as entering an era of political and economic stability. It is adopting free-market economic policies, and beer import duties have been reduced over the past several years. Its population of 150 million is growing by 1.7 percent per year.

Antarctica, based in Sao Paulo, was established in 1885 and produces the Antarctica brand, which is the eighth-largest beer brand in the world. Based on its performance during the second half of 1994, Antarctica controls more than 34 percent of the Brazilian beer market. Its annual beer production in 1994 was 17 million barrels (20 million hectoliters). It also produces and markets the Bavaria, Kronenbier, Antarctica Pilsen Extra, Antarctica Bock, Antarctica Munchen Extra, Polar, Niger, Bohemia and Serra Malte beer brands.

In soft drinks, Antarctica holds approximately 20 percent of the Brazilian market with its world famous Guarana Champagne Antarctica brand, which leads the non-cola segment. Other Antarctica brands also lead in the lemon-lime and tonic segments.

Building on the continued growth and record sales in Anheuser- Busch's domestic beer company, Anheuser-Busch International, Inc. also had record volume in 1994 of 4.5 million barrels (5.3 million hectoliters), the tenth consecutive year in which it achieved record volume. That volume total includes U.S. exports and foreign-produced Anheuser-Busch beers. Anheuser-Busch International increased its earnings by about 50 percent in 1994, making it the second largest contributor to the parent company's consolidated earnings growth.

Anheuser-Busch International, Inc. is a subsidiary of Anheuser- Busch Companies, Inc., and is responsible for the company's foreign beer operations and for exploring and developing beer markets outside of the United States. Its activities include contract and license brewing, exports, sales, marketing and distribution of the company's beers in foreign markets, as well as equity partnerships with leading foreign brewers. With sales in more than 70 countries, Anheuser-Busch International is the leading exporter of beer from the United States, accounting for about 43 percent of all beer exports.

Anheuser-Busch, based in St. Louis, sold a record 88.5 million barrels (103.8 million hectoliters) of beer in 1994, a 1.4 percent increase over the previous year and the 18th consecutive year of record sales. Sales to retailers, considered a more accurate measure of underlying consumer demand, increased 2.8 percent in 1994. The company now holds a leading 45 percent share of the U.S. beer market -- up 0.3 percent -- and a 9 percent share of the world beer market.

CONTACT: USA: Terri Vogt, [phone]

Brazil: Mauricio Kus, (5511) 852-9926,

for Anheuser-Busch