SABMiller seals $10.2 billion Foster's with a beer
By David Jones
LONDON (Reuters) - Brewing giant SABMiller SAB.L agreed to buy Foster's Group FGL.AX for a sweetened price of A$9.9 billion ($10.2 billion) on Wednesday after talks between the two last week ended in a couple of beers which sealed the deal this week.
Peace broke out in the acrimonious three-month bid battle as SABMiller Chief Executive Graham Mackay offered to raise its cash bid by 20 cents to A$5.10 a share, and then sat down with Foster's Chairman David Crawford to celebrate with a beer.
"It became obvious that we were not that far apart so we started talking last week and this week I sat down with David Crawford for a couple of beers," Mackay told a briefing after announcing the takeover of Australia's biggest brewer.
As part of the deal, Melbourne-based Foster's will also return 30 cents a share as a capital return it promised in August after a tax refund and pay a final dividend of 13.25 cents. The total value of the deal, including debt, is A$11.5 billion.
Mackay expects that SABMiller's biggest ever takeover deal will close by the end of the year and put SABMiller at the head of the Australian beer market with a near-50 percent share and give the combined group an uplift from Australia's strong economic growth prospects.
Foster's Chief Executive John Pollaers said the deal offers outstanding value for Foster's shareholders, and emphasized the strength of the 150-year-old Australian beer maker having sought to turn around the business since his appointment in May.
"Today highlights once again the very bright future for Foster's and demonstrates what a prized business this is in the global beer industry," he told a briefing.
The former navy weapons engineer had previously defended the maker of Victoria Bitter, Carlton Draught and Pure Blonde from the hostile SABMiller bid by promising a return of cash to shareholders and looking to revive the brewer's earnings. Continued...