Bid interest in Australasia’s drinks sector fired up this week when London-listed SABMiller launched a A$9.5bn ($9.9bn) hostile takeover of Foster’s and Japan’s Asahi agreed to buy New Zealand’s Independent Liquor for NZ$1.5bn ($1.2bn).
Australia and New Zealand are mature markets but both deals are driven by the appeal of adding cash-generative businesses to a wider portfolio.
Foster’s swift rejection of SABMiller, whose A$4.90 a share cash bid was pitched at the same level as its June approach, set the scene for what could prove a drawn-out battle.
The Australian brewer’s hand has been weakened by an absence of rival suitors, volatile stock markets and analysts’ forecasts that tough trading conditions in the beer market will weigh heavily on its full-year figures, due on Tuesday.
Although SABMiller’s approach has not won backing from Foster’s big shareholders, there is still pressure on the Australian group’s board to secure an improved offer.
But there are also questions about SABMiller’s ability to increase what is an already large takeover at a time when some of its investors are cautious about a deal that moves its focus away from emerging markets.
SABMiller’s bid is conditional on 90 per cent acceptance, and Credit Suisse this week said the plan could be thwarted if a rival builds a blocking stake.
Asahi’s move on Independent follows a trio of deals by the Japanese group in Australasia’s drinks sector in recent years.