UK: S&N buys Foster's brand outright in Europe
Scottish & Newcastle has bought the Foster's brand outright in Europe, Russia and parts of the CIS for GBP309m (US$539m).
The UK's largest brewer has held the licence on the Foster's brand in the UK, Ireland and parts of Europe since 1995. Under that agreement, S&N paid the brand's owner, Foster's Group annual royalties, which in the year to 31 December 2005, amounted to GBP15m.
In addition to the territories covered in the 1995 agreement, S&N will acquire the
Foster's brands in Turkey and countries in the CIS, including Armenia, Georgia and Kazakhstan.
S&N said full ownership of the Foster's brands - which account for 14% of its annual volumes - was "critical to realise their full potential in terms of marketing, packaging and new product development".
S&N chief executive Tony Froggatt said he was "delighted" that the company had gained full control over a "core" brand in "key markets".
He said: "This has significant branding and strategic benefits and provides an enhanced platform from which we expect to continue to grow the highly successful Foster's brands to the benefit of our shareholders and consumers alike. As an Australian, I am proud that S&N is custodian of one of Australia's best known brands."
The move comes as Foster's weighs up the long-term future of its international brewing business. The company is looking to sell its brewing operations in a number of Asian markets after returns fell far short of expectations.
S&N has been linked with the assets up for grabs but Froggatt declined to comment on any interest the company may have in the operations.
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