AUSTRALIA: Foster's eyes smaller wine acquisitions
The Australian beer and wine group, Foster's, is on the acquisition trail but the managing director of its wine division, Walt Klenz, said that the company's balance sheet was not strong enough at present to undertake a major acquisition. Klenz identified the $4 billion Californian winery, Kendall-Jackson, as a "theoretical candidate" for such a major acquisition but said that a takeover of that magnitude would not be possible until the end of 2003
Klenz, who took over as managing director of the group's Beringer Blass wine division last October after Terry Davis's departure, said the group's US operation was anticipating sales growth of between 12% and 13% in the first half of 2002, despite sluggish conditions at the top end of the market. Sales in the off trade were solid, Klenz said.
After being put up for sale by its owner, Jess Jackson, in 2001, Kendall-Jackson, one of the largest wine companies in the US, attracted interest from a number of large wine concerns including BRL Hardy. But Jackson withdrew the company from the market last May when offers fell short of his US$2 billion asking price.
Speculation about any major bid from Foster's would appear to be premature. Last week, Foster's Group CEO, Ted Kunkel, said that the company would not be in a position to make another large wine acquisition until late next year. However, Klenz stated that smaller wine acquisitions might be pursued in the meantime and the group was currently sizing up three or four opportunities.
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