According to Fox Business, brewing giant SABMiller agreed to buy Foster’s Group for a price of $10.2 billion on Wednesday after talks between the two last week ended in a few beers, which sealed the deal this week. After a three month bid battle between SABMiller Chief Executive Graham Mackay and Foster’s Chairman David Crawford, Mackay offered to raise its cash bid by 20 cents to A$5.10 a share.
“It became obvious that we were not that far apart so we started talking last week and this week I sat down with David Crawford for a couple of beers,” said Mackay.
As a part of the deal, Foster’s will also return 30 cents a share as a capital return it promised in August after a tax refund and pay a final dividend of 13.25 cents. The total value of the deal, including debt, is A$11.5 billion.
Foster’s Chief Executive John Pollaers said the deal offers outstanding value for Foster’s shareholders, and emphasized the strength of the 150-year-old Australian beer maker having sought to turn around the business since his appointment in May.
“Today highlights once again the very bright future for Foster’s and demonstrates what a prized business this is in the global beer industry,” he said in a briefing.
SABMiller shares were off 1.9 percent at 21.79 pounds by 8:30am EST, while Foster’s shares closed at A$4.89 earlier on Wednesday before the deal was announced. Analysts said the deal’s value came at the higher end of recent beer transactions, but Foster’s did have one of the highest beer margins in the beer world and, as one of the few big brewers still available to buy, had scarcity value.
“I’m a bit surprised that the board has come back so quickly and approved a bid that looks to be only marginally higher,” said fund manager Theo Maas, of Arnhem Investment Management in Sydney.
Foster’s has been a favorite to take over, with other big brewing rivals saddled by high debts after recent deals such as Anheuser Busch InBev costly $52 billion 2008 takeover of Anheuser Busch, and Heineken which bought Mexico’s FEMSA Cerveza in 2010.
