SAB turns hostile with A$9.5bn bid for Foster's investors

When the British-based brewer SABMiller offered A$4.90 (£3.14) a share for the Australian beer giant Foster's in June, the latter's chief executive, John Pollaers, dismissed the approach as "so far away from reality it wasn't worth engaging".

Now SABMiller – which makes Grolsch, Miller Lite and Peroni – has gone directly to shareholders with the same offer, which values the group at A$9.5bn. It said it was making the move because of a lack of "willingness to engage" by the Foster's board.

The hostile bid comes less than a week before the Australian company's annual results, which surprised some analysts. They are expected to show a decline in beer profits for Foster's, which spun off its struggling wine operation in May to focus on the beer division.

Although Foster's is considered a quintessentially Australian brand, its lager is far more popular in Britain than in its country of origin. Australians, who have seen most of their favourite home-grown brands – including Vegemite spread and Arnott's Biscuits – taken over by foreign companies, seem resigned to the prospect of the nation's biggest brewer going the same way.

Foster's declined to comment yesterday on the latest move by SABMiller, the world's second largest brewer.

SABMiller said the offer would be reduced by any future dividend paid by Foster's. Some shareholders hailed the bid as a way of breaking the deadlock. "The move is welcome in that it'll get the parties engaged," Matthew Williams, Australian equities manager at Perpetual Investments – which has a 4.7 per cent stake in Foster's – said. "The ball is in play."

SABMiller, listed in London and Johannesburg, said it believed its offer was "attractive" and should be put to shareholders. "As there has been no willingness to engage in relation to SABMiller's proposal on the part of the Foster's board, SABMiller has decided to make an offer to Foster's shareholders directly," it said.

In June, analysts said the brewer might have to pay up to A$5.50 a share. Forecasts have now been revised downwards to A$5.10-$5.20.

If results next Tuesday are disappointing, it will add to the pressure on Foster's. Its shares closed up 0.6 per cent yesterday at A$4.96.

Foster's, whose flagship brands are VB, Crown and Carlton Draught, has been losing market share as a result of fierce competition and a shrinking domestic market as Australia has become a nation of wine drinkers.

Statistics published in June show beer consumption at a 62-year low.

Foster's lager was launched in the UK in the 1980s with the slogan "Foster's – Australian for lager", and a memorable TV advertising campaign fronted by the Crocodile Dundee star Paul Hogan, who waxed lyrical about the "amber nectar".

However, the lager brand in the UK is now owned by Heineken and most genuine Australian beer in the UK is brewed in Manchester.

Australia's second largest brewer, Lion Nathan, which makes Tooheys and XXXX, is already foreign-owned: it was taken over by Japan's Kirin in 2009. Few doubt that Foster's will go the same way. Only the timing and the price are in doubt.

Carlsberg hit by tax rises

Carlsberg posted a 22 per cent fall in quarterly profits yesterday, mainly due to an increase in taxes on beer in Russia.

Shares in the Danish brewer sank 17 per cent in Copenhagen after it more than halved its forecast for full-year earnings growth from 20 per cent to 5-10 per cent.

Its chief executive, Joergen Buhl Rasmussen, said that results in Russia had been "below expectations" and that a recovery would take longer than expected as Russian consumers adapt to a rise in the average price of beer of about 30 per cent.

The group's international beer brands include Carlsberg, Tuborg and Baltika, which is the leader on the Russian market. The company has a 38.4 per cent share of the Russian beer market.

Carlsberg's second-quarter net profits were 2.1bn kroner (£247m), down from Dkr2.6bn a year ago. Its sales rose 4 per cent to Dkr18.7bn over the quarter.

Jens Houe Thomsen, an analyst with Jyske Bank, said the brewer's results had been hit "primarily [by] the sharp price increases we have seen since last year's [Russian] tax increases", which had affected consumption.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Life and Style
Fans line up at the AVNs, straining to capture a photo of their favourite star
life Tim Walker asks how much longer it can flesh out an existence
Life and Style
Every minute of every day, Twitter is awash with anger as we seek to let these organisations know precisely what we think of them
techWhen it comes to vitriol, no one on attracts our ire more than big businesses offering bad service
Professor David Nutt wants to change the way gravely ill patients are treated in Britain
people Why does a former Government tsar believe that mind-altering drugs have a place on prescription?
Norway’s ‘The Nordland Line – Minute by Minute, Season by Season’ continues the trend of slow TV
Arts and Entertainment
Jonny Evans has pleaded not guilty to an FA charge for spitting at Papiss Cisse
Life and Style
Kate Moss will make a cameo appearance in David Walliams' The Boy in the Dress
The image released by the Salvation Army, using 'The Dress'
Liverpool defender Kolo Toure
football Defender could make history in the FA Cup, but African Cup of Nations win means he's already content
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Relations Officer

£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Jemma Gent: Project Coordinator

£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable