Britain-based brewer SABMiller yesterday launched a hostile takeover bid for Australian beer giant Foster’s worth around A$9.5 billion (US$10 billion) after an initial approach was rejected in June.
SABMiller, the maker of beers Grolsch and Miller Lite, said its renewed offer was unchanged at A$4.90 per Foster’s share.
“SABMiller believes that the proposal put to the Foster’s Board is attractive and should be put to Foster’s shareholders,” SABMiller said in a statement to the London Stock Exchange.
“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,” the company said.
The maker of Foster’s Lager had yet to respond to the hostile bid, but in June said the offer “significantly undervalues” the company.
Foster’s, which owns Australia’s largest brewer Carlton and United Breweries, recently split its beer division from the underperforming wine assets which had suffered because of a grape glut and soaring local dollar.
The prospect of a takeover of Foster’s, one of Australia’s best known brands, had been anticipated since the demerger and the move follows consolidation within the Australian beverage industry.
SABMiller’s pursuit of the Australian company is meanwhile in line with its strategy to create a global spread of businesses.
It has noted that Australia has a strong, wealthy and growing economy that is well positioned to benefit from continued economic growth in Asia, and has a profitable beer market.
Foster’s has been battling intense competition in the beer industry, affecting its flagship brands VB, Crown and Carlton Draught. Foster’s estimated that the domestic beer market shrank 7 percent in the second half of last year.
SABMiller is one of the world’s largest brewers and its brands also include Peroni Nastro Azzurro, Tyskie and Blue Moon.
In May, the company said that annual net profits for last year and this year had jumped by a quarter to US$2.4 billion on rising sales in developing markets.