SABMiller to examine £7bn Foster’s deal

SABMILLER, the acquisitive drinks company, will look at a £7bn takeover of Australian brewer Foster’s Group’s beer-making arm when it demerges its businesses next year.

SABMiller would be likely to come up against competition for Carlton & United Breweries from Asahi, the Japanese beer manufacturer, and America’s Molson Coors. Carlton & United is seen as Foster’s prize asset and generates around 85 per cent of the group’s earnings. It boasts a juicy profit margin of 38.5 per cent.

Foster’s sparked talk of a bidding war in May when it said it would split off its beer operation from its troubled wine unit. The separation, expected in the first half of next year, would provide an opportunity for SABMiller to pounce.

SABMiller chief executive Graham Mackay has made no secret of his desire to consolidate the brewing industry. When he moved the company’s main listing from Johannesburg to London in 1999, Mackay said: “There will be a lot of deals in this industry and we either have to take part or be a spectator.”

Since then he has proven true to his word, transforming SABMiller into the world’s second-largest brewer by buying Pilsner Urquell, Peroni of Italy, Miller of the US, Colombia’s Bavaria and Holland’s Grolsch.

Buying Carlton & United would give it control of Australia’s most popular beer, Victoria Bitter, as well as a platform from which to expand in south east Asia. SABMiller would be able to challenge Anheuser-Busch InBev for global pole position.

SABMiller recently made Morgan Stanley joint house broker, although the move is not related to a deal.