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Foster’s Rejects A$11.2b SABMiller Approach

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Foster’s Rejects A$11.2b SABMiller Approach

Foster’s Rejects A$11.2b SABMiller Approach
June 21
10:03 2011

Foster’s Group, the largest brewer in Australia, has rejected an unsolicited A$11.2b (Eur8.3b) acquisition approach from SABMiller. The proposal to acquire Foster’s is in line with SABMiller’s strategy to create an attractive global spread of businesses, with a focus on developing strong and successful brand portfolios.

Australia has a strong, wealthy and growing economy with consistent long term population growth in key demographics, and is well positioned to benefit from continued economic growth in Asia. Australia has a profitable beer market in which Foster’s is the leading brewer with 7 of the top 10 beer brands, a national distribution platform and scale production.

The proposed price of A$4.90 a share in cash represents an enterprise value for Foster’s of A$11.2b and a forecast EV/EBITDA multiple of 12.5 times. However, the board of Foster’s believes that the proposal significantly undervalues the company.

“SABMiller has a proven track record of acquiring and integrating brewing companies in a way which benefits shareholders, employees, business partners and the broader community,” says Graham Mackay, chief executive of SABMiller. “We continue to believe that the proposal price is attractive and offers good value to Foster’s shareholders. SABMiller can conclude a transaction quickly and will continue to seek engagement with the board of Foster’s to put an agreed proposal to Foster’s shareholders.”

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