Scottish & Newcastle Buys Foster's Lager
LONDON - British brewer Scottish & Newcastle PLC said Tuesday it has agreed to buy the Foster's lager brand in Europe and Russia for 309 million pounds ($538 million) from Australian brewer Foster's Group Ltd.
The deal means Scottish & Newcastle, which has brewed, packed and marketed the brand in Europe and Russia since 1995 under a license, will no longer have to pay royalty payments to Foster's.
Last year alone, S&N paid 15 million pounds ($26 million) in royalties.
"This has significant branding and strategic benefits and provides an enhanced platform from which we expect to continue to grow the highly successful Foster's brands to the benefit of our shareholders and consumers alike," said S&N's Chief Executive Tony Froggatt.
He added that the Foster's brand represents 14 percent of S&N's sales by volume in Britain and Continental Europe.
S&N shares slumped 4.1 percent to 510 pence ($8.89) after the announcement, as analysts suggested the deal lessened the likelihood of a takeover bid for the British company.
S&N shares had been lifted in recent weeks by persistent rumors of a takeover.
LONDON - British brewer Scottish & Newcastle PLC said Tuesday it has agreed to buy the Foster's lager brand in Europe and Russia for 309 million pounds ($538 million) from Australian brewer Foster's Group Ltd.
The deal means Scottish & Newcastle, which has brewed, packed and marketed the brand in Europe and Russia since 1995 under a license, will no longer have to pay royalty payments to Foster's.
Last year alone, S&N paid 15 million pounds ($26 million) in royalties.
"This has significant branding and strategic benefits and provides an enhanced platform from which we expect to continue to grow the highly successful Foster's brands to the benefit of our shareholders and consumers alike," said S&N's Chief Executive Tony Froggatt.
He added that the Foster's brand represents 14 percent of S&N's sales by volume in Britain and Continental Europe.
S&N shares slumped 4.1 percent to 510 pence ($8.89) after the announcement, as analysts suggested the deal lessened the likelihood of a takeover bid for the British company.
S&N shares had been lifted in recent weeks by persistent rumors of a takeover.
