SABMiller Plc, the world’s second largest brewer by volume, may need to include its Australian partner Coca-Cola Amatil Ltd or negotiate a buyout of their venture if it bids for Foster’s Group Ltd.
The terms of their partnership require any SABMiller alcohol expansion in Australia to be first offered to their Pacific Beverages venture, which holds rights for brands, including Peroni, Miller and Grolsch, Coca-Cola Amatil Chief Executive Officer Terry Davis said in an interview.
“If the joint venture says no, then they have a bit of a problem,” Davis said over the telephone. “You can expect that I would want fair value for those brands.”
Pacific Beverages was formed in 2006 with an aim to create Australia’s third-largest beer business in a market where more than 90 per cent of sales are controlled by Foster’s and the Lion Nathan unit of Kirin Holdings Co. SABMiller is working with JPMorgan Chase & Co to study a bid for Foster’s once Australia’s biggest brewer completes a spin-off of its wine unit, a person with knowledge of the situation has said.
“There might be a breakup fee in the hundreds of millions,” said Theo Maas, who holds beverage stocks among the $5 billion he helps manage at Arnhem Investment Management in Sydney.