Fight for Foster's Ends as Board OKs SABMiller Bid

LONDON-- Three months after receiving a takeover bid from SABMiller -- one that went hostile in August -- the Foster's Group has accepted the offer. The Australian beer maker gave a thumbs up to the improved takeover bid worth Aus$9.9 billion from the British-based brewer.

SABMiller made an initial $10.1-billion offer in June, which Foster's dismissed as too low. SABMiller's push for the company took another turn in August when the company made a conditional, off-market $9.97-billion cash offer to Foster's shareholders. In response, Foster's attempted to thwart the bid by announcing it would return at least $500 million to its shareholders, perhaps via a share buyback.

But earlier today, according to SABMiller, Foster's board of directors accepted the bid, bringing the battle to an end. The pact is for an improved cash offer of Aus$5.10 per Foster's share. SABMiller said it expects the takeover to be completed before the end of this year after approval by Foster's shareholders, according to the global news agency AFB.

The agreed-upon proposal represents an acquisition enterprise value of Aus$11.5 billion, which is a 2.8-percent increase on the enterprise value of Aus$11.2 billion implied by SABMiller's initial proposal on June 21, according to a company statement.

"Foster's will become an important part of our business, and through the application of our commercial capabilities and global scale, we expect to build on the initiatives that Foster's management has put in place, further enhancing Foster's performance and creating value for our shareholders," SABMiller Chief Executive Graham Mackay said in a statement. "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."

Foster's is well-known for its lager brands including Corona and Foster's. SABMiller produces rival beers such as Grolsch and Miller Lite.

"This is a compelling proposal from SABMiller and represents the value inherent in this iconic Australian company and in its brands and people," said Foster's Chairman David Crawford in a separate release.

Foster's, which owns Australia's largest brewer Carlton and United Breweries, recently split its beer division from its underperforming wine assets that had suffered because of a grape glut and soaring local dollar, the news agency reported.

For SABMiller's part, the move fits into its strategy to extend its global reach. SABMiller operates in 75 countries, while it is also a major bottler of Coca-Cola.