AP

AS IN an old-fashioned Western bar brawl, Anheuser-Busch tried to hit InBev with anything that came to hand. The American brewer was attempting to rebuff an assault by its Belgian-Brazilian rival, which had offered $46 billion in an unsolicited bid on June 11th. Anheuser-Busch tried to use the business equivalent of a bar stool over the head—a lawsuit claiming that InBev had misled investors. The American firm even dealt the low blow of citing InBev's Cuban businesses as a reason to reject the bid.

These tactics came to nothing, however, after InBev opened its wallet and upped the offer to $52 billion, which Anheuser-Busch gratefully accepted on Sunday July 13th. In fact InBev had been prepared to fight sneaky too. In an effort to outflank the founding Busch family (which owns only 4% of the company's shares) it used family disagreement. The bidders proposed a new board of directors that would include Adolphus Busch, the uncle of August Busch, the existing chief executive of the American firm who was dead against the merger. Adolphus promptly urged Anheuser-Busch to accept InBev's offer.

Anheuser-Busch had come up with its own cost-cutting plan to counter the offer from InBev. But that was no match for Inbev's hard cash, particularly after it agreed to raise its offer to $70 a share. Agreeing to the deal at this price is probably a better outcome than dealing with a long and distracting hostile bid. The deal is a good one for many reasons.

Big brewing mergers of late have been driven by two differing goals. The recent acquisition of Britain's Scottish & Newcastle by Carlsberg and Heineken niftily encapsulated both. Heineken got its hands on S&N's operations in Britain and elsewhere. As in America and other countries where the beer market has matured, growth is slow or non-existent. Here brewers can crunch together operations such as management and distribution, so cutting costs and boosting profits. The merging of the American operations of SABMiller and Molson Coors last year was driven by the same motives.

The other way to grow bigger profits is by acquiring businesses in emerging markets where beer drinking has boomed. Carlsberg's side of the deal saw the Danish brewer get its hands on BBH, a joint venture with a Russian brewer.

A sensible brewer keeps a foot in both camps. Mature market brewers such as Anheuser-Busch, can be fantastically profitable, even if growth is negligible and handy targets are in ever shorter supply. In emerging markets demand is volatile and margins are slim. Growth in beer drinking in these new markets has suffered as food prices have spiralled. The rising prices of beer's main ingredients (barley for the drink, aluminium for cans) have cut margins slimmer.

InBev, by buying Anheuser-Busch, will insulate itself against the volatility of emerging markets—over a half of its profits come form its Latin American operations. Although there is little overlap with operations in America (unlike Molson Coors and SABMiller) Anheuser is generally reckoned to be ripe for some cost cutting. Although InBev pledged that no brewery closures would take place, it wants to make savings of $1.5 billion by 2011, which suggests some workers will go. InBev reputation for ruthless efficiency could also mean that Anheuser-Busch's famous Clydesdale horses are put out to pasture.

The merger of the world's number two and number three brewers by volume will create a combined company with more than $36 billion in annual revenues and a better negotiating position with suppliers of expensive ingredients. The two will also gain extra traction in China with their combined operations. The beer market there is enticing because of rapid growth, but it is also highly fragmented and hard for big western brewers to crack.