The board-endorsed bid for Foster’s Group by SABMiller is a positive and significant result for the Australian M&A market, say lawyers.

Mark Pistilli, managing partner of Clifford Chance Australia, which provided advice to the financiers of the deal, said the transaction, expected to be completed by December 16, is a significant result for the local M&A market for a number of reasons. “It shows that there is an appetite for big ticket M&A despite the global economy,” said Pistilli. He added that the deal also demonstrates that there is debt available and that M&A is happening outside the mining and resources sector. He also said it showed there is interest in the Australian market despite the stronger local currency. "There is no doubt that the strength of the currency has made Australian targets more expensive to international buyers, but as this deal shows, buyers are interested if it's an attractive enough target,” he told ALB.

This is a sentiment echoed by Freehills partner Tony Damian: “The deal demonstrates the continuing high levels of interest in Australian assets. Along with other deals in the market, Foster’s shows that the high Australian dollar is not deterring foreign bidders wishing to make cash bids,” he said.

Mallesons Stephen Jaques partner Dave Eliakim also stated that the deal shows foreign investors are not put off by high Australian dollar. In addition, he added that it demonstrates to foregin investors that Australia welcomes investment, as there has been no sign of Foreign Investment Review Board resistance "based on Foster's iconic Australian brand image". 

Allens Arthur Robinson is the lead advisor to Foster’s Group and stands to profit a tidy sum from the transaction. Corrs Chambers Westgarth, who advised the brewer on its demerger of the wine business earlier this year, made A$10 million from the transaction.

Anglo South African brewer SABMiller will pay A$12.3 billion for the brewer in a scheme of arrangement which represents a 13% increase on the original proposal. The second biggest beer company in the world will use internal resources and financing to fund the cash consideration. SABMiller is being adviser by Allen & Overy (Sydney and London) and Hogan Lovells. Allen & Overy partner Tony Sparks told ALB he and the firm were seeing a lot of M&A interest from foreign bidders at the moment. “In addition to our other recent deals we are currently acting for Banpu Minerals in its recommended takeover of Hunnu Coal - which was announced only last week,” said Sparks.

Related stories:
Allens and A&O act on Foster’s takeover bid  18 August 2011

Global debt and despair have little impact on M&A here, say lawyers 24 August 2011