Well, it’s finally happened. It was inevitable, really – when a colossus like SABMiller (LSE: SAB.L) is interested in acquiring your company, you can only fight the power for so long. After a fierce three-month battle, SABMiller will be adding Australian beer producer Foster’s to its stable of big name brands like Peroni and Miller Genuine Draft for a staggering A$9.9 billion ($10.2 billion U.S.), nearly half a billion more than their original offer in June.
According to reports, the bitter fight between the two brewing companies softened considerably when SABMiller CEO Graham Mackay raised his company’s bid for Foster’s by twenty cents from A$4.90 to A$5.10. Mackay and Foster’s Chairman David Crawford sat down with some beers and hashed out a deal that would leave both parties satisfied. In addition to the share raise, the deal also stipulates that Foster’s will also pay shareholders a capital return of 30 cents per share before closing, in keeping with Foster's Group’s previously announced capital management initiative. All in all, the deal is valued at A$11.5 billion.
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"We are pleased that we have reached agreement on a recommended transaction to be put to Foster's shareholders,” said Mackay in a press release from SABMiller. "Foster's will become an important part of our business, and through the application of our commercial capabilities and global scale, we expect to build on the initiatives that Foster's management has put in place, further enhancing Foster's performance and creating value for our shareholders.”
SABMiller and Foster’s will be working together closely to draw up documents for Foster’s shareholders within the next six weeks. It’s expected that the acquisition will be complete before the end of the year.