E-Malt.com News article: Australia: Coopers to remain the biggest Australian-owned brewer if Foster’s Beer is taken over

A successful foreign takeover of Foster's Group would leave Coopers Brewery in Adelaide as the biggest Australian-owned brewer, The Australian reported on June, 21.

Coopers, famous for its Sparkling Ale and Pale Ale brands, was founded in 1862.

International brewer SABMiller's bid for Foster's, described by its supporters as friendly, lobbed in London at about 11pm Australian time.

The bid, which Foster's immediately labelled "unsolicited, incomplete, non binding and conditional", offers A$4.90 a share for all of Foster's, valuing the brewer at about A$9.5 billion.

The bid, which Foster's also said "significantly undervalues the company in the context of a change of control" is at a modest 8 per cent premium to June 20's closing share price of A$4.53.

SABMiller, which has South African origins, a US brewing brand and a London listing, has a joint venture with Coca-Cola Amatil that looks likely to be broken up at a significant profit to CCL, since SABMiller wants to make this bid on its own.

CCL announced that if SABMiller's bid for Foster's goes unconditional, CCL will sell its 50 per cent stake in the Pacific Brands joint venture for a price "between A$305 million and A$380 million". The stake is on the CCL books at A$95m.

Pacific Brands brews BlueTongue beer near Gosford in NSW and distributes in Australia SABMiller's brands, headed by Peroni Nastro Azzuro, Miller Genuine Draft, Miller Chill, Grolsch and Pilsner Urquell.

Foster's is known to have been a target for possible overseas bids because it recently spun off its struggling wine division, presenting bidders with a much cleaner target.

If the bid succeeds, and the indications are that it will have a long way to go, that will close the door on Australian ownership of major local brewing interests.

The Kirin group of Japan in 2009 took out minority interests in the Lion Nathan operation, making it entirely Japanese owned. Both of the Tasmanian brewers, Cascade (Foster's) and James Boag (Kirin), were snapped up by the majors in recent years, leaving only a raft of smaller brewers and microbreweries to claim exclusive Australian ownership.

Supporters of the SABMiller bid noted that the price being offered by SABMiller for Foster's is 12.5 times EBITDA earnings (before interest, depreciation and amortisation) which is in line with the Kirin takeout bid.

Any offshore bid for Foster's will have to go before the Foreign Investment Review Board.

SABMiller is being advised by Moelis and Co and Foster's is being advised by Goldman Sachs, Gresham and lawyers Allens Arthur Robinson.


22 June, 2011