Australias biggest brewer, Fosters, hasnt even officially put itself on the market, yet the suitors are lining up.
A week after news hit that Molson Coors Brewing (NYSE:TAP) and Mexicos Grupo Modelo, which makes Corona, were considering a bid for Fosters, it became public that the worlds second-largest brewer by volume, SABMiller, offered to scoop up the company for $10 billion in cash.
Beverages group Coca-Cola (NYSE:KO) Amatil had to amend the terms of a brewing joint venture with SABMiller just to allow the London-based companys $10 billion offer for Fosters, but the brewer rejected the bid, claiming it was too low.
"The board of Foster's believes that the proposal significantly undervalues the company," Melbourne-based Foster's said in a statement.
Following that announcement, Fosters shares surged to their highest price since early 2007.
SABMiller had said it was interested in the buy because it was in line with its strategy to create an attractive global spread of businesses, and because Fosters is Australia's leading brewer with seven of the top 10 beer brands.
Australia has a strong, wealthy and growing economy with consistent long-term population growth in key demographics. The country is also well position to benefit from continued economic growth in Asia.
Despite the rejection, SABMiller still plans on pursuing Fosters.
We continue to believe that the proposal price is attractive and offers good value to Fosters shareholders, SABMiller CEO Graham Mackay said in statement. SAB Miller can conclude a transaction quickly and will continue to seek engagement with the board of Fosters to put an agreed proposal to Fosters shareholders.
Fosters has been considered an attractive acquisition target for larger brewers and private-equity companies since spinning off its wine businesses earlier this year.
The Wall Street Journal reported last week that Molson Coors and Grupo Modelo were considering a joint takeover bid for Foster's. But sources told the Journal that the deal seemed unlikely after Modelo executives chose not the put the proposal up for vote at a board meeting.