Bosses defend iconic Foster's sale

Bosses defend iconic Foster's sale

LIQUOR NEWS

Fin24 - Sep 22nd 2011, 08:55

Sydney - Foster's executives on Thursday defended the decision to approve a takeover for the iconic Australian brewer that will put it in foreign hands for the first time in its 150-year history. 

The beer giant, which produces VB and Crown Lager, has agreed to an improved offer worth Aus$9.9bn from Anglo-South African brewer SABMiller [JSE:SAB], or Aus$5.10 per share.

It follows Foster's rejection of a hostile bid from the same company, whose brands include Grolsch and Miller Lite, of Aus$9.51bn in August.

Shares in the Australian brewer were trading at Aus$5.27 mid-afternoon in Sydney.

Foster's chief executive officer John Pollaers said the deal would open up new opportunities and he did not expect opposition from the government or regulators.

"Ultimately this is a great deal for a company and frankly a great deal for the staff and our customers," he told ABC television.

But not everyone is happy that the firm, whose origins in Melbourne date back to the 1850s, was falling into foreign hands.

Former Foster's chief John Elliot said he was aghast and hit out at management.

"It is a disaster. One of the great Australian icons is now gone because of exceptionally bad management and an exceptionally bad board," he told The Australian newspaper.

With Lion Nathan already in the hands of Japanese brewer Kirin, the Foster's takeover will leave Coopers as the biggest Australian-owned beer company with around four percent of the market.

There had been concern that Foster's head office would not remain in Australia, but Pollaers said "you can't really move a brewery making VB anywhere else".

"So I think you'll continue to see heavy investment in our business in Australia."

He added that he believed SABMiller was committed to doing "what's right" to keep the workforce in Australia, but would not be drawn on possible job cuts.

Foster's workers said they were worried and only found out about the takeover through the media.

Jess Walsh, Victorian secretary of the United Voice union, said staff were concerned not just about jobs but whether SABMiller understood the cultural and historical significance of the Abbotsford brewery in Melbourne.

"The most important thing is that whoever owns the company understands the significance of the Abbotsford brewery in production but also culturally," she said.

"It's where brands like Victoria Bitter have been made for 100 years, so their concern is that whoever owns the company understands that historical link.

"It may not necessarily matter where the ownership of the company is located, but it does matter obviously to the workers - (and) also to Australians - where the beer is produced."

SABMiller expects the takeover to be completed before the end of the year, following approval by Foster's shareholders.

"We look forward to working with Foster's employees and other stakeholders to ensure the success of Foster's in the future, as the largest brewer in Australia with an outstanding portfolio of brands," chief executive Graham Mackay said.

A takeover of Foster's had been expected since the group's recent demerger of its wine and beer operations and amid consolidation within the Australian beverage industry.