(Repeats to add link to Snap Analysis)
* SABMiller, Asahi looking at Foster's beer unit - sources
* Foster's shares jump 7.6 pct
* Foster's has no formal takeover bids - source
* Molson Coors, Coca-Cola Amatil possible suitors - analysts
* SABMiller no comment, shares up 0.5 percent
(Rewrites with further analysts, background, shares
By Michael Smith and David Jones
SYDNEY/LONDON, Aug 23 Brewing groups SABMiller
SAB.L and Asahi Breweries (2502.T) are looking at Foster's
Group's FGL.AX beer operations, valued at more than $10
billion, but have not yet made any formal offers, sources said.
Long-running interest in the Australian brewer's beer
business, know as Carlton & United Breweries, resurfaced on
Monday after newspaper reports said SABMiller was considering
buying Australia's biggest brewer.
Foster's said in May it would split the beer unit from its
ailing wine business, putting its valuable beer operations with
brands including Foster's Lager, Victoria Bitter and Pure Blonde
at the centre of takeover talk in the brewing world.
The Australian beer market is a virtual duopoly with some of
the highest profit margins in the brewing world and Foster's
controls half the market, with most of the rest held by
Kirin-owned (2503.T) Lion Nathan. The national beer market is
broadly stable rather than in decline like Western Europe.
Most of the other big brewers such as Anheuser-Busch InBev
(ABI.BR), Heineken (HEIN.AS) and Carlsberg (CARLb.CO) are likely
to be restricted from bidding due to high debts from previous
deals, and so analysts expect a narrow field in an auction.
A SABMiller spokesman had no comment to make on Foster's and
said it planned no announcements on Monday. After an early fall,
SABMiller's shares rose 0.5 percent to 18.60 pounds by 1100 GMT.
Analysts expect any suitors will only emerge after Foster's
splits off its wine division in early 2011 when complex debt and
structural issues are resolved, and they were doubtful over an
early beer sell-off deal.
"We remain sceptical that any bid will come here before the
planned demerger of the beer division in early 2011," said
analyst Ian Shackleton at brokers Nomura in London.
Analyst Matthew Webb at JP Morgan Cazenove believes
SABMiller will look at Foster's beer business, could entirely
debt fund the deal, be moderately earnings enhancing in the
first year and make annual cost savings of around $150 million.
He values Foster's beer business at a historic 13.3 times
core EBITDA earnings putting a value on it of $11 billion.
Asahi, Japan's No.2 brewer after Kirin, is also interested
in Foster's, sources said. It has been building up a war chest
for acquisitions and keen to expand outside Asia, but Asahi
declined to comment. Nomura and Rothschild are advising Asahi.
"SAB and Asahi are the two names that keep popping up and
given the demerger process in train you would expect people who
ever thought they might look at Foster's to get teams together
to do so," said one source familiar with the situation.
Graphic on Foster's share price performance:
StarMine data set on Foster's and potential suitors:
Snap Analysis: [ID:nLDE67M14A]
Interview with Asahi president: [ID:nTOE67107L]
Dealtalk on Foster's beer bids: [ID:nSGE65005I]
Analysts say Foster's beer could also be a target for
Canadian brewer Molson Coors (TAP.N), which owns a derivative-
based 5 percent stake in Foster's, and Coca-Cola Amatil (CCL.AX)
which has a joint venture with SABMiller in Australia.
The takeover talk pushed Foster's shares up more than 7
percent to their highest level in more than two years, with
volume three times the daily average over the past 30 days.
The shares closed up 7.6 percent at A$6.26.
Responding to a media report in Britain's Sunday Times over
SABMiller's interest, Foster's said on Monday it was not aware
of any unannounced information driving the stock.
The Australian newspaper reported on Monday that SABMiller
had hired JPMorgan and Royal Bank of Scotland as advisers for a
potential bid but no decision had been made. Sydney-based
Gresham Advisory Partners is advising Foster's.
SABMiller, which is the world's second largest brewer after
AB InBev and brews Peroni, Miller Lite and Grolsch already owns
the brewing rights to Foster's beer in the United States and in
India, while Heineken owns the rights in Europe.
Asahi President Naoki Izumiya said this month he expects to
have $9.2 billion for acquisitions over the next five years,
with eyes on Asia and Oceania. It has already bought Cadbury's
Australian soft drinks business Schweppes for $995 million and a
19.9 percent stake in China's Tsingtao Brewery (600600.SS) for
$667 million, both in 2009.
Japanese brewers have been scrambling to diversify, mainly
by overseas acquisitions, to cut their reliance on the local
beer market, which has lost 15 percent in volume in the past
decade due to a sputtering economy and shrinking population.
(Additional reporting by James Topham in Tokyo; Editing by
Anshuman Daga and Louise Heavens)