To get ownership of all Foster's assets including the brand

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At a glance


SABMiller

will look to extend Foster's Lager nationally through its network

Aurangabad brewery

to serve as a platform for access to the Mumbai market

Bangalore, Aug. 4

SABMiller plc on Friday said it has entered into an agreement to acquire a 100 per cent interest in Foster's India for $120 million on a cash-free debt-free basis, subject to certain conditions being fulfilled. Under the terms of the agreement, SABMiller will assume ownership of all Foster's assets in the country, including the Foster's brand in the territory.

A press statement from the company said Foster's India currently operates one brewery based in Aurangabad with a licensed annual capacity of 350,000 hectolitres. The company produces, distributes and supports Foster's Lager, Amberro Mild and Amberro Strong beer brands in the Indian market.

In the year ended June 30, 2006, total beer sales were 236,000 hectolitres with Foster's Lager representing 88 per cent of total production and sales.

India is the third largest market for the Foster's brand globally and it has achieved a compounded annual growth rate of 13 per cent since operations commenced in 1998. It has a presence in 19 States and has a substantial share of the mild beer segment in Maharashtra.

SABMiller India will look to extend Foster's Lager nationally through its network of 10 breweries and seek significant cost benefits from brewing and distributing the brand locally. The Aurangabad brewery will also provide additional capacity for SABMiller's presence in Maharashtra as well as a platform for access to the Mumbai market.

SABMiller India is the subcontinent's second largest brewer. Its brand portfolio includes Royal Challenge, Haywards 5000, Castle and the recently launched Haywards Black, India's first stout beer.

"This transaction enhances our existing portfolio in India and provides us with an exciting opportunity to further increase our premium brand offering. The acquisition also supplies much needed capacity to fuel the strong growth we have experienced so far this year," the SAB Miller Africa and Asia Managing Director, Mr Andre Parker, said in the statement.

(This article was published in the Business Line print edition dated August 5, 2006)
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