By Andrew Starke
The London-listed global beer giant SAB Miller is believed to be considering a bid for the Foster’s Group with analysts citing a number of synergies between the two companies.
Fosters last week announced its intention to demerge its beer and wine division, a decision that has fueled speculation about a possible sale both locally and in the UK.
According to the UK’s Daily Telegraph, SAB Miller is in the process of taking advice on a potential move for Foster’s with price and financing structure likely to be the primary considerations.
While Coca-Cola Amatil (CCA) has ruled out a bid, both Molson Coors, which owns a five percent stake in Foster's, and Asahi are considered possible suitors.
Both the Deutsche Bank Group and BlackRock Investment Management became substantial shareholders in Foster’s last week with each acquiring a five percent stake.
SAB Miller, which began life as South African Breweries but is listed on the London Stock Exchange, is the world’s third largest brewer.
It already owns Foster's in India and holds the brewing rights to the brand in the US.
SABMiller global brands include Peroni and Grolsch and the company operates as Pacific Beverages in Australia – a joint venture with Coca-Cola Amatil – that will likely have greater local significance when it opens its Bluetongue brewery next month.
The Daily Telegraph speculated that: “SAB is thought to regard Foster's brewing arm as a high margin business which has been badly managed and believes a foothold in Australia would give it a base from which to expand across Asia, and particularly China.”
SAB Miller shares took a hit earlier this month (May) when the brewer missed profit forecasts.
However, the football World Cup, which is being held in South Africa, SAB's second-most profitable region, is likely to give the company a modest boost to sales this year.
Shares in Fosters were trading at $5.57 at midday today (May 31), up from $5.27 a week ago.