SABMiller Agrees Deal To Buy Foster's At A$5.10/Share
September 21 2011 - 5:52AM
Dow Jones News
SABMiller PLC (SAB.LN), a brewing and beverage company announced
Wednesday that it has agreed with Foster's Group Limited (FGL.AU) a
recommended cash offer to Foster's shareholders at A$5.10 per
share, which values Foster's equity at A$9.9 billion.
MAIN FACTS:
-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 A$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.
-The agreed proposal represents an acquisition enterprise value
of A$11.5 billion, which is a 2.8% increase on the enterprise value
of A$11.2 billion implied by SABMiller's initial proposal announced
on June 21, 2011.
-The acquisition of Foster's is consistent with SABMiller's
strategic priorities and will provide SABMiller with:
*exposure to Australia's strong economic growth prospects;
*a leading position in the stable and profitable Australian beer
industry; and
*the opportunity to apply SABMiller's capabilities and scale to
improve Foster's financial and operating performance.
-The acquisition is expected to be EPS enhancing for SABMiller
in the first full year of ownership and economic returns are
expected to exceed the project WACC by year 5.
-Foster's has commenced the process of obtaining a ruling from
the Australian Tax Office or ATO confirming the tax treatment of
the capital reduction.
-SABMiller has internal resources and committed financing to
fund the cash consideration, and SABMiller expects to maintain a
strong investment grade credit profile.
-SABMiller has separately reached agreement with Coca-Cola
Amatil Limited (CCL.AU) to be able to acquire its share of the
Pacific Beverages Pty Limited joint venture should SABMiller
acquire a controlling interest in Foster's.
-SABMiller has entered into a number of cash settled equity swap
contracts that provide it with an economic exposure equivalent to
78 million shares (being 4.0% of the total number of issued
Foster's shares), which will reduce SABMiller's aggregate cash cost
of the transaction consideration by A$69 million.
-SABMiller expects the acquisition to be completed before the
end of 2011.
-Shares at 0919 GMT down 28.5 pence, or 1.3%, at 2192.5 pence.
-By Zechariah Hemans, Dow Jones Newswires; 44-20-7842-9411;
zechariah.hemans@dowjones.com
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