Several foreign takeover suitors are understood to be sizing up the Foster Group for a potential takeover, the Sydney Morning Herald reported on Tuesday.
“The world’s largest brewer, InBev, is believed to be running the rule over Foster’s, with its next largest competitor, SABMiller, rumoured to be also be mulling over whether to make a AUS$11-billion-plus play for Australia’s largest wine and beer group,” the report said.
InBev and SABMiller have made no secret of their interest in the Asia-Pacific, with both recently spending billions of dollars recently to gain strong footholds in the fast-growing Chinese and Indian beer markets.
“Now, it appears the two have a growing interest in Australia’s beer market which, while a mature one, would provide both companies with a solid base in the region — along with healthy cash flows,” the report added.
SABMiller this month sought to lift its presence in Australia by forming a joint-venture with Coca-Cola Amatil, to distribute its Peroni Nastro Azzuro, Pilsner Urquell and Miller’s Draft brands, the newspaper noted.
“Amatil and SABMiller also have not ruled out the future potential of building breweries in Australia through their joint venture,” the report added.
While Foster’s has raised almost $1-billion in recent months selling its international brewing operations, rivals such as SABMiller and InBev have been driving the global consolidation of the global beer market, the paper stated.
“SABMiller this month bought the Foster’s name along with its breweries in India for $120-million, while Foster’s also offloaded its Vietnam and Chinese brewing businesses. Earlier this year, Foster’s sold its brand name in Europe to Scottish & Newcastle.
“The Foster’s flagship beer label — which prides itself as being the world’s seventh highest selling “premium” beer brand — is being seen as an increasingly attractive target, particularly given the recent interest of large private equity firms in Australia,” the Sydney Morning Herald added. – I-Net Bridge