ANHEUSER-BUSCH, the US brewer of Budweiser, yesterday said it would cut costs and increase share buy-backs as it set out its justification for rejecting a $46 billion (€29.14 billion) bid from rival brewer InBev.

August Busch, Anheuser's chief executive, told investors that the board had taken the bid "very, very seriously", but had concluded that it undervalued Anheuser when compared with similar transactions in the global beer business involving iconic brands.

He said Anheuser could deliver the cost savings envisaged in the InBev bid, and stressed the potential of Anheuser's business in Mexico, China, India and Europe.

In a step towards achieving a new target of more than $1 billion of cost savings in the next two years, Anheuser said it would cut 10 to 15 per cent of its workforce of 8,600 through early retirement. It also said it would increase share buy-backs this year to $3 billion from $2 billion previously, and to $4 billion from $1.8 billion in 2009.

The brewer also forecast that its earnings per share this year would increase in the low double digits, ahead of Wall Street's current consensus estimate of an 8 per cent increase in earnings. It did not announce any plans to dispose of non-core assets. Anheuser argued that its new strategic initiatives were under way before it received the InBev offer. It also did not definitively reject the possibility of a deal with InBev, should the Belgium-based brewer raise its offer.

InBev, the world's largest brewer, said on Thursday in court documents that it was prepared to launch a proxy battle seeking the removal of Anheuser's entire board, citing "delays and apparent plans to attempt to block the acquisition". It said Mr Busch had indicated in talks prior to the bid that Anheuser was "not for sale" and that the board was committed to it remaining independent. It also said it still wanted a "constructive dialogue" over its $65-a-share offer.