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Merger offer is nixed by Foster's.

Australia's S.A. Brewing Holdings had its proposed merger rejected by fellow Aussie Foster's Brewing Group, according to a recent report in the Wall Street Journal.

The deal was rejected by Foster's directors because the proposal was not "advantageous" to its shareholders. More specifically, Foster's director, N.R. Clark, said S.A. Brewing's "non-beer businesses are incompatible with the current Foster's businesses and that the S.A. Brewing proposal offers minimal synergies while exposing Foster's to substantial downsides with continuing instability."

The original proposal called for a share exchange between the two companies, with no money changing hands. S.A. Brewing would then assume management of the merged companies and inject over $750 million of equity into the brewery.

The rejection of this offer allowed Foster's to concentrate on building its brewing assets, which analysts said, the company has begun to do. A venture that is seen as an effective Foster's takeover attempt of the smaller Power Brewing Co., in Brisbane, Australia, was announced on the same day as the merger rejection.

The new Foster's proposal called for a joint venture between the two breweries to be called Queensland Breweries Pty, which will have an equal number of directors from Powers and from Carlton & United Breweries, a Foster's division.

Australia's antitrust regulators will examine the proposed merger in the near future.
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Title Annotation:deal between S.A. Brewing Holdings Ltd. and Foster's Brewing Group Ltd.
Publication:Modern Brewery Age
Date:Jun 22, 1992
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