just the Facts – Foster’s Demerger

In case you’ve been hiding under a rock today, Foster’s has announced the demerger of its wine and beer businesses. Here, just-drinks gives you the deal at-a-glance.

• Foster’s will fully demerge its wine and beer arms, giving them separate executive boards and separate stock listings.

• The company does not expect to implement the move until early 2011.

• As for why, Foster’s CEO Ian Johnston said: “We are increasingly seeing the benefits of operationally separating the beer and wine businesses.” After appointing new management in both beer and wine, and having seen an improvement in the global economy, Foster’s thinks the time is right.

• The move has refreshed speculation that multinational brewers will chase Foster’s Australian beer operations. Johnston said today that the group has received “no approaches”.

• Foster’s faces a further AUD1bn (US$829.1m) non-cash charge on its wine assets in the current fiscal year, reflecting an anticipated re-evaluation of the assets during the demerger process.

• The group has sold 20 out of 32 non-core vineyards it put up for sale last year, representing around half of the total 5,000 hectares Foster’s hopes to divest across Australia and California.

• Foster’s expects an EBITS of around AUD1bn for the year to the end of June.

• It added that it is on-track to achieve cost savings of AUD100m per year from fiscal 2011.

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