USA: Foster's made "takeover of the decade" with Beringer deal

By Chris Brook-Carter | 12 October 2000

A leading Wall Street analyst believes Foster's was allowed to buy California's Beringer Wine Estates "too cheaply".David Goldman, a securities analyst with SunTrust equitable Securities, said yesterday that the A$2.6 billion acquisition plucked the largest listed wine company off the US share market, leaving the sector "looking like a flat tyre".He said: "I take my hat off to Foster's for the best value takeover deal of the entire decade. The purchase price was at the lower end of its potential value," he said.Goldman, speaking at a wine industry symposium, believed that the Beringer deal would be followed up by far more expensive acquisitions in the future, as the world's drinks companies fought to consolidate and grow in an increasingly profitable wine industry.Furthermore, although US wine stocks were historically unpopular, the US industry was wide open to further takeovers because of its relative share market under performance.He said that wine consumption in the US would double by 2005 and expand even more rapidly from 2010 and 2015. Foster's wine arm Mildara Blass would benefit from the foothold it now had in the market.Beringer on the other hand, would benefit from Foster's world-class distribution network.

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A leading Wall Street analyst believes Foster's was allowed to buy California's Beringer Wine Estates "too cheaply".David Goldman, a securities analyst with SunTrust equitable Securities, said yesterday that the A$2.6 billion acquisition plucked the largest listed wine company off the US share market, leaving the sector "looking like a flat tyre".He said: "I take my hat off to Foster's for the best value takeover deal of the entire decade. The purchase price was at the lower end of its potential value," he said.Goldman, speaking at a wine industry symposium, believed that the Beringer deal would be followed up by far more expensive acquisitions in the future, as the world's drinks companies fought to consolidate and grow in an increasingly profitable wine industry.Furthermore, although US wine stocks were historically unpopular, the US industry was wide open to further takeovers because of its relative share market under performance.He said that wine consumption in the US would double by 2005 and expand even more rapidly from 2010 and 2015. Foster's wine arm Mildara Blass would benefit from the foothold it now had in the market.Beringer on the other hand, would benefit from Foster's world-class distribution network.

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