On Sept. 21, SABMiller plc, London, entered into an agreement with Melbourne, Australia-based Foster Group Ltd. to acquire all shares in the company. After increasing its initial offer, SABMiller agreed with Foster Group Ltd.’s board to a cash offer of AUD $5.10 per share for Foster’s shareholders, which values Foster’s equity at approximately AUD $9.9 billion, SABMiller says.
As part of the transaction, and in line with Foster's previously announced capital management initiative, Foster's will pay its shareholders a return of capital of AUD $0.30 per share prior to closing, reflecting both the confirmed value of historic tax losses and a better cash/net debt position than assumed in SABMiller's initial proposal, according to SABMiller. Shareholders also will receive the 13.25 cents cash per share fiscal year 2011 final dividend for Foster’s shareholders who owned shares Sept. 7, 2011, Foster’s says.
“The board believes SABMiller’s revised proposal of $5.5325 cash per share, which includes the 13.25 cents final dividend, reflects compelling value for Foster’s shareholders and delivers certain cash proceeds in an uncertain global economic environment with high equity market volatility,” Foster’s Chairman David Crawford said in a statement.
By acquiring Foster’s, SABMiller will gain exposure in the Australian market, a leading position in the Australian beer industry and the opportunity to apply SABMiller’s capabilities and scale to improve Foster’s financial and operating performance, the company says.
SABMiller expects the first full year of ownership to enhance earnings per share, and that economic returns will exceed the projected weighted average cost of capital by the fifth year, it says.
"Foster's has a long-standing and proud reputation as one of the leading companies in Australia,” said Graham Mackay, chief executive officer of SABMiller, in a statement. “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."
The Scheme Implementation Deed agreement is recommended by the Foster’s board and is subject to shareholder approval, court approval and other conditions. Foster’s expects the transaction to be completed before the end of this calendar year.