Foster’s accepts SABMiller’s A$5.10 per share takeover offer

Posted by AFN Staff Writers on 22nd September 2011

Multi-national brewer SABMiller has agreed with Foster’s Group Limited a recommended cash offer to Foster’s shareholders at A$5.10 per share, which values Foster’s equity at approximately A$9.9 billion.

The agreement is the culmination of a long-running series of negotiations between the two companies, with SABMiller recently mounting pressure on the Australian brewer.

As part of the transaction, Foster’s will pay its shareholders a return of capital of A$0.30 per share prior to closing, reflecting both the confirmed value of historic tax losses and a better cash/net debt position than assumed in SABMiller’s initial proposal.

SABMiller and Foster’s have agreed that the offer will be effected by means of a scheme of arrangement to be proposed by Foster’s to its shareholders.

SABMiller’s proposal is valued at A$11.5 billion, which is a 2.8% increase on the $11.2 billion initially proposed by SABMiller on 21 June 2011.

SABMiller’s Chief Executive, Graham Mackay said, “The acquisition of Foster’s is consistent with SABMiller’s strategic priorities and will provide SABMiller with exposure to Australia’s strong economic growth prospects; a leading position in the stable and profitable Australian beer industry; and the opportunity to apply SABMiller’s capabilities and scale to improve Foster’s financial and operating performance.”

Mr Mackay said that SABMiller and Foster’s have agreed to work together to prepare the necessary documents to be considered by Foster’s shareholders. The scheme document is expected to be posted to Foster’s shareholders in approximately six weeks. If approved by shareholders at the relevant scheme meetings later this year, SABMiller expects the acquisition to be completed before the end of 2011.

Mr Mackay  added, “Foster’s has a long-standing and proud reputation as one of the leading companies in Australia. We look forward to working with Foster’s employees and other stakeholders to ensure the success of Foster’s in the future as the largest brewer in Australia with an outstanding portfolio of brands.”

SABMiller has previously announced a separately reached agreement with Coca-Cola Amatil Limited to be able to acquire its share of the Pacific Beverages Pty Limited joint venture should SABMiller acquire a controlling interest in Foster’s.