Commentary - 06/12/2008

Foreign Owners: First Your Bullets, Now Your Beer!

First, let's start with your beer. Maybe you've heard that a European corporation (Belgian to be specific) has offered to buy out the owners of Budweiser. If you haven't heard, here's a few links:
Market cheers InBev's $46 bln Anheuser-Busch bid MarketWatch
Americans rally round Anheuser-Busch after takeover bid AFP
InBev set to raise offer for Anhauser-Busch TimesOnLine(UK)

InBev, the Belgian maker of Stella Artois and Beck's beers, is expected to raise its offer for Anheuser-Busch to as much as $50 billion (25.6 billion) in an attempt to persuade the American brewer's board to recommend a deal.

Analysts believe that the Budweiser brewer will reject the opening gambit of $65 a share but will be forced by institutional shareholders, including Warren Buffett, to start talks if the bid is raised closer to $70.

Do you ever wonder how such deals get done? Super-smart Wall-Street types? Maybe. but it helps if you're already holding most of the high cards. The article even names Warren Buffett, who's simply another agent that makes up the Top 10 Major Holders of Anheuser-Busch. You have to understand that this has been planned for a long time, with those participating quietly buying up Anheuser's shares. As of March 31, 2008, the most recent data I have access to, you can see the current status here of the Major Holders.

As noted, the Top Ten Major Holders, which make up 1% of institutional holders, already control over 31% of Anheuser-Busch. If we had the time to check out the other 856 institutional holders, we could readily prove through their inter-connections that these 1%'ers control much more than that. But that would prove nothing. The point is that every time you buy a Bud, or even a Corona, these major holders get a large share of the profit, most of which leaves your neighborhood and soon to leave your country.

So what does that have to do with bullets? Same deal. America's major ammunition manufacturer is the Lake City Arsenal in Independence, Missouri. It was started by Remington with Dupont's help. Then Dupont slowly acquired all of Remington's shares, later passing control over to Olin Corporation, which in turn passed on control over to Alliant Technology (ATK), who controls it now. Unfortunately, Lake City couldn't make enough ammunition, according to this article:

FORT BELVOIR, Va. The U.S. military's only plant making small-arms ammunition is running at near capacity, 4 million rounds a day, and the United States still is forced to look overseas and to the recreational industry for ammunition for troops in Afghanistan and Iraq and those training to deploy there soon.
. . .
The sole plant making small-arms ammunition, the Lake City Army Ammunition Plant in Independence, Mo., is running three eight-hour shifts a day, six days a week. The plant provides 5.56 mm rifle, 7.62 mm and .50 caliber machine gun as well as 9 mm pistol cartridges for all branches of the military.
. . .
Because of the increased demand for ammunition since the Sept. 11, 2001, attacks and America's wars in Afghanistan and Iraq, Kern said the Army in late December let two supplemental contracts to Olin Winchester of East Alton, Ill., (Olin Corp is based in Clayton, Missouri) and Israeli Military Industries for each to produce 70 million rifle rounds per month starting in June.
However, you might want to take a look at this article, which makes me wonder how all these bullets are being used.
US forces have fired so many bullets in Iraq and Afghanistan - an estimated 250,000 for every insurgent killed - that American ammunition-makers cannot keep up with demand. As a result the US is having to import supplies from Israel.
. . .
The Pentagon reportedly bought 313 million rounds of 5.56mm, 7.62mm and 50-calibre ammunition last year and paid $10m (about 5.5m) more than it would have cost for it to produce the ammunition at its own facilities.
Damn, there's that Israel connection again.

Anyway, taking a look at the Top 10 Major Holders of Alliant TechSystem, you'll see that it's simply a corporate plantation, as no insiders have enough shares to even register 1%. That means management are only plantation managers, simply answering to the TOP 10 Major Holders controlling over 71% of its shares.

Wow! No wonder this so-called War on Terror is NOT going to end anytime soon.
The financial predators just can't take enough to be satisfied.
Just like a black hole in space.
You already pay them for your bullets, and now you might just have to pay them for your beer, too.

Unfortunately: Sometimes The Dragon Wins

Symbol Name Of Corporation

Anheuser Busch (As of 31-Mar-2008)
Top 10 Institutional HoldersShares2008Value2007
Barclays Global Investors UK Holdings Ltd43,704,4286.13%$2,073,775,108-.--%
Berkshire Hathaway, Inc35,563,2004.99%$1,687,473,840-.--%
State Street Corporation23,837,7823.34%$1,131,102,755-.--%
Vanguard Group, Inc. (The)22,130,2503.10%$1,050,080,362-.--%
Price (T.Rowe) Associates Inc17,432,6222.44%$827,177,913-.--%
Bank Of America Corporation14,947,2462.10%$709,246,822-.--%
U.S. Bancorp (Minnesota)12,364,6051.73%$586,700,507-.--%
Allianz Global Investors of America L.P. (Munich, Germany)10,139,2711.42%$481,108,408-.--%
Northern Trust Corporation9,206,9651.29%$436,870,489-.--%
Bank of New York Mellon Corporation8,655,5741.21%$410,706,986-.--%
% of Shares Held by All Insider and 5% Owners:1%-.--%
Top 10 [1.1%] of 866 Institutional Holders Control27.75%-.--%
Percentage of Barclays and "Associates" Control18.24%-.--%
NOTE: Vanguard manages three funds that control 2.24%.
T.Rowe Price manages two funds that control 1.05%.
Allianz manages a fund that controls 0.49%.
Therefore, the TOP 10 Major Holders control 31.53%, and
Barclays/Associates control 19.29% of Anheuser Busch.

Symbol Name Of Corporation

Alliant Techsystems Inc. (As of 31-Mar-2008)
Top 10 Institutional HoldersShares2008Value2007
Neuberger Berman, LLC2,148,4586.55%$222,429,856-.--%
Price (T.Rowe) Associates Inc2,096,1756.39%$217,016,997-.--%
FMR LLC (Fidelity)1,902,4035.80%$196,955,782-.--%
JP Morgan Chase & Company1,858,6715.67%$192,428,208-.--%
Harris Associates, LP1,717,3375.24%$177,795,899-.--%
Wellington Management Company, LLP1,577,1004.81%$163,277,163-.--%
Barclays Global Investors UK Holdings Ltd1,247,4573.80%$129,149,223-.--%
Goldman Sachs Group Inc1,214,7843.70%$125,766,587-.--%
Arnhold & S. Bleichroder Advisers Inc. *1,201,8103.66%$124,423,389-.--%
Vanguard Group, Inc. (The)1,068,2213.26%$110,592,920-.--%
% of Shares Held by All Insider and 5% Owners:0%-.--%
Top 10 [3.6%] of 275 Institutional Holders Control48.88%-.--%
Percentage of Barclays and "Associates" Control31.35%-.--%
NOTE: Neuberger Berman manage a fund that controls 5.76%.
Fidelity manages two funds that control 5.63%.
T. Rowe Price manages a fund that controls 4.57%.
JP Morgan manages a fund that controls 2.64%.
Goldman Sachs manages two funds that control 2.05%.
Arnhold & Bleichroder's First Eagle fund controls 1.93%.
Therefore, the Top 10 Major Holders control 71.46%, and
Barclays/Associates control 46.37% of Alliant TechSystems.

Symbol Name Of Corporation

Olin Corporation (As of 31-Mar-2008)
Top 10 Institutional HoldersShares2009Value2007
Lord Abbett & Co *8,644,72111.57%$170,819,686-.--%
State Street Corporation6,152,1308.23%$121,566,088-.--%
Barclays Global Investors UK Holdings Ltd3,621,8964.85%$71,568,664-.--%
Prudential Financial, Inc.2,903,1353.88%$57,365,947-.--%
Vanguard Group, Inc. (The)2,268,8763.04%$44,832,989-.--%
Bank Of America Corporation1,909,9002.56%$37,739,624-.--%
Bank of New York Mellon Corporation1,718,8502.30%$33,964,476-.--%
LSV Asset Management1,623,2532.17%$32,075,479-.--%
Merrill Lynch & Co., Inc.1,338,5231.79%$26,449,214-.--%
AXA (Paris, France)1,181,1951.58%$23,340,413-.--%
% of Shares Held by All Insider and 5% Owners:0%-.--%
Top 10 [4.1%] of 242 Institutional Holders Control41.97%-.--%
Percentage of Barclays and "Associates" Control23.61%-.--%
NOTE: Lord Abbett manages two funds that control 7.76%.
Vanguard manages two funds that control 1.51%.
Therefore, the TOP 10 Major Holders control 51.24% of Olin Corporation.

2008 by Edward Ulysses Cate
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