Foster’s CEO defends SABMiller takeover

Foster’s executives on Thursday defended the decision to approve a takeover for the iconic Australian brewer that will put it in foreign hands for the first time in its 150-year history.

The beer giant — which produces Victoria Bitter (VB) and Crown Lager — has agreed to an improved offer worth $9.9-billion (Australian dollars or $10.16-billion) from Anglo-South African brewer SABMiller, or $5.10 per share.

It follows Foster’s rejection of a hostile bid from the same company, whose brands include Grolsch and Miller Lite, of $9.51-billion in August.

Shares in the Australian brewer were trading at $5.27 mid-afternoon in Sydney.

Foster’s chief executive officer John Pollaers said the deal would open up new opportunities and he did not expect opposition from the government or regulators.

“Ultimately this is a great deal for a company and frankly a great deal for the staff and our customers,” he told ABC television.

But not everyone is happy that the firm, whose origins in Melbourne date back to the 1850s, was falling into foreign hands.

Former Foster’s chief John Elliot said he was aghast and hit out at management.

“It is a disaster. One of the great Australian icons is now gone because of exceptionally bad management and an exceptionally bad board,” he told the Australian newspaper.

With Lion Nathan already in the hands of Japanese brewer Kirin, the Foster’s takeover will leave Coopers as the biggest Australian-owned beer company with around 4% of the market.

There had been concern that Foster’s head office would not remain in Australia, but Pollaers said “you can’t really move a brewery making VB anywhere else”.

“So I think you’ll continue to see heavy investment in our business in Australia.”

He added that he believed SABMiller was committed to doing “what’s right” to keep the workforce in Australia, but would not be drawn on possible job cuts.

Understanding the ‘historical link’
Foster’s workers said they were worried and only found out about the takeover through the media.

Jess Walsh, Victorian secretary of the United Voice union, said staff were concerned not just about jobs but whether SABMiller understood the cultural and historical significance of the Abbotsford brewery in Melbourne.

“The most important thing is that whoever owns the company understands the significance of the Abbotsford brewery in production but also culturally,” she said.

“It’s where brands like Victoria Bitter have been made for 100 years, so their concern is that whoever owns the company understands that historical link.

“It may not necessarily matter where the ownership of the company is located, but it does matter obviously to the workers — [and] also to Australians — where the beer is produced.”

SABMiller expects the takeover to be completed before the end of the year, following approval by Foster’s shareholders.

“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,” chief executive Graham Mackay said.

A takeover of Foster’s had been expected since the group’s recent demerger of its wine and beer operations and amid consolidation within the Australian beverage industry. — AFP

Martin Parry
Martin Parry
AFP News Editor for Australia/New Zealand/Pacific

Mabuza’s ‘distant relative’ scored big

Eskom’s woes are often because of boiler problems at its power plants. R50-billion has been set aside to fix them, but some of the contracts are going to questionable entities

ANC faction gunning for Gordhan

The ambush will take place at an NEC meeting about Eskom. But the real target is Cyril Ramaphosa

What the law could clarify this year

Lawfare: Major developments are on the cards where law and politics meet, including the first amendment to South Africa’s Bill of Rights

The secret ‘Warmonger’ at the SSA

A listening device acquired by the agency is at the centre of an alleged R600-million fraud operation

Press Releases

New-style star accretion bursts dazzle astronomers

Associate Professor James O Chibueze and Dr SP van den Heever are part of an international team of astronomers studying the G358-MM1 high-mass protostar.

2020 risk outlook: Use GRC to build resilience

GRC activities can be used profitably to develop an integrated risk picture and response, says ContinuitySA.

MTN voted best mobile network

An independent report found MTN to be the best mobile network in SA in the fourth quarter of 2019.

Is your tertiary institution is accredited?

Rosebank College is an educational brand of The Independent Institute of Education, which is registered with the Department of Higher Education and Training.

Is your tertiary institution accredited?

Rosebank College is an educational brand of The Independent Institute of Education, which is registered with the Department of Higher Education and Training.

VUT chancellor, Dr Xolani Mkhwanazi, dies

The university conferred the degree of Doctor of Science Honoris Causa on Dr Xolani Mkhwanazi for his outstanding leadership contributions to maths and science education development.

Innovate4AMR now in second year

SA's Team pill-Alert aims to tackle antimicrobial resistance by implementing their strategic intervention that ensures patients comply with treatment.

Medical students present solution in Geneva

Kapil Narain and Mohamed Hoosen Suleman were selected to present their strategic intervention to tackle antimicrobial resistance to an international panel of experts.