SABMiller Agrees Deal To Buy Foster's At A$5.10/Share

SABMiller PLC (SAB.LN), a brewing and beverage company announced Wednesday that it has agreed with Foster's Group Limited (FGL.AU) a recommended cash offer to Foster's shareholders at A$5.10 per share, which values Foster's equity at A$9.9 billion.

MAIN FACTS:

-As part of the transaction, and in line with Foster's previously announced capital management initiative, Foster's will pay its shareholders a return of capital of A$0.30 per share prior to closing, reflecting both the confirmed value of historic tax losses and a better cash/net debt position than assumed in SABMiller's initial proposal.

-The agreed proposal represents an acquisition enterprise value of A$11.5 billion, which is a 2.8% increase on the enterprise value of A$11.2 billion implied by SABMiller's initial proposal announced on June 21, 2011.

-The acquisition of Foster's is consistent with SABMiller's strategic priorities and will provide SABMiller with:

*exposure to Australia's strong economic growth prospects;

*a leading position in the stable and profitable Australian beer industry; and

*the opportunity to apply SABMiller's capabilities and scale to improve Foster's financial and operating performance.

-The acquisition is expected to be EPS enhancing for SABMiller in the first full year of ownership and economic returns are expected to exceed the project WACC by year 5.

-Foster's has commenced the process of obtaining a ruling from the Australian Tax Office or ATO confirming the tax treatment of the capital reduction.

-SABMiller has internal resources and committed financing to fund the cash consideration, and SABMiller expects to maintain a strong investment grade credit profile.

-SABMiller has separately reached agreement with Coca-Cola Amatil Limited (CCL.AU) to be able to acquire its share of the Pacific Beverages Pty Limited joint venture should SABMiller acquire a controlling interest in Foster's.

-SABMiller has entered into a number of cash settled equity swap contracts that provide it with an economic exposure equivalent to 78 million shares (being 4.0% of the total number of issued Foster's shares), which will reduce SABMiller's aggregate cash cost of the transaction consideration by A$69 million.

-SABMiller expects the acquisition to be completed before the end of 2011.

-Shares at 0919 GMT down 28.5 pence, or 1.3%, at 2192.5 pence. -By Zechariah Hemans, Dow Jones Newswires; 44-20-7842-9411; [e-mail]