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Value Creation At Anheuser-Busch: A Real Options Example

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  • Tom Arnold
  • Richard L. Shockley

Abstract

The management of Anheuser-Busch created $11.5 billion of shareholder value between 1996 and 1998, a period in which U.S. demand for beer was flat and the company's profits grew only modestly. Of that $11.5 billion, the authors estimate that nearly $10 billion can be attributed to the growth options created or expanded by the company during that period. While divesting itself of unrelated businesses, such as snack foods, Busch stadium, and the St. Louis Cardinals baseball franchise, the company began purchasing minority equity interests in brewing concerns in markets with growing demand for beer, including Mexico, Brazil, Chile, Argentina, and the Philippines. 2001 Morgan Stanley.

Suggested Citation

  • Tom Arnold & Richard L. Shockley, 2001. "Value Creation At Anheuser-Busch: A Real Options Example," Journal of Applied Corporate Finance, Morgan Stanley, vol. 14(2), pages 52-61.
  • Handle: RePEc:bla:jacrfn:v:14:y:2001:i:2:p:52-61
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    Cited by:

    1. Cassimon, Danny & Engelen, Peter-Jan & Yordanov, Vilimir, 2011. "Compound Real Option Valuation with Phase-Specific Volatility: a Multi-phase Mobile Payments Case Study," MPRA Paper 46053, University Library of Munich, Germany.
    2. Delgado Juárez Gabriel & Pérez Akaki Pablo, 2013. "Evaluación de la conversión a café orgánico usando la metodología de opciones reales," Contaduría y Administración, Accounting and Management, vol. 58(1), pages 87-115, enero-mar.

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