Foster's accepts SABMiller takeover bid

The deal marks the largest acquisition by SABMiller, and gives it a significant presence in Australia given that Foster's claims half of the country's beer market. The bid of A$5.10 per share values Foster's at 12.5x EBIDTA, which is above the 11.5x average for similar transactions in the brewing industry, according to Bloomberg data.

The acquisition gives Foster's an enterprise valuation of A$11.5 billion, 2.8% higher than SABMiller's previous buyout offer made in June. That bid was for A$4.90 per share in cash - up from the company's last trading price of A$4.53 - which Foster's believed "significantly undervalues the company in the context of a change of control."

One month earlier, Foster's spun off its distressed wine brand - provoking considerable interest from private equity - in order to make its remaining business more desirable. The resulting company, Treasury Wine Estates, has yet to be sold, despite David Crawford, chairman of Foster's Group, confirming months earlier that it would entertain offers from PE and trade suitors.

In late August, China's Bright Food Group was said to be discussing possibilities with Foster's Group for Treasury Wine Estates.

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• Topics
• Buyouts
• Australasia
• Consumer
• AVCAL