Blog: Foster's takeover talk is a load of froth
Olly Wehring | 30 August 2006
Is Foster’s Group really a takeover target? Despite shares in the Australian drinks giant fizzing to their highest point in over 15 years this week, speculation that InBev or SABMiller would be interested in buying the company seems wide of the mark.
Foster’s would be unattractive to a pure brewer. The company generates around 40% of its profits from its wine business, operations that it is also still in the process of restructuring after its takeover of Southcorp.
InBev or SABMiller would not derive any synergies from keeping Foster’s wine assets and would need to line up a buyer for the business. While, in theory, that is not out of the question, few major wine players would be keen to snap up a wine portfolio that remains unsettled post-Southcorp.
Nor does Foster’s appear ready to follow the sale of its international beer business by offloading its domestic brewing assets. The company has worked hard to organise its domestic distribution arrangement along multi-beverage lines, where beer, wine and spirits are handled together. What’s more, Foster’s enjoyed a 17% rise in earnings from its domestic beer business, proving it can make money from a mature beer market.
SABMiller has already signalled where it thinks future growth in the Australian beer market will be with a joint venture with Coca-Cola Amatil that will push its stable of premium beer brands.
InBev, meanwhile, is unlikely to plunge into a mainstream Australian beer market categorised by slow growth when it has enough problems driving sales in similar markets in Western Europe.
Foster’s CEO Trevor O’Hoy may have spent the last couple of days saying that the company was on the “radar” of multinational drinks producers as a “strategic” asset but this sounds like a move to reassure investors that the company is a dynamic one - rather than an indication that bids are on the horizon.
Last year was tough for The Coca-Cola Co. So staff in Atlanta won't be pleased to read that Pepsi has overtaken Diet Coke as the no. 2 soda brand in the US. ...
A bit of football fun for a Friday. Anheuser-Busch InBev has released the ad that will accompany its new Budweiser 'Dream Goal' campaign, that seeks to find the UK's best amateur goal. ...
No sooner had Anheuser-Busch InBev taken a gentle pop at the craft beer segment during February's Super Bowl, than the world's largest brewer has challenged the sub-category's target market in New Yor...
A few wry grins will have been raised in the offices of Dr Pepper Snapple Group today. ...
- Is A-B InBev/SABMiller 'Mega-Merger' Off?
- Sustainability: What Craft Teaches Multi-Nationals
- Scotch Whisky Top 20 Export Markets 2014
- Ethiopia competition to remain "intense" - Diageo
- Pernod takes positives from China Cognac bounce
- Heineken to cut jobs in global shake-up
- Bacardi bags a Bourbon with Angel's Envy buy
- Bacardi Brown-Forman here to stay
- Moet Hennessy sells Scotch Malt Whisky Society
- Carlsberg takes on Stella Artois in new campaign
- Global rum insights - market forecasts, product innovation and consumer trends research
- ALDI 2015: Radically transforming Anglo Saxon grocery markets
- Heineken N.V. - Strategy and SWOT Report
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends research
- Champagne: Less Than Bubbly