Case Study代写:福斯特的收购与防御行动

Strategies and approaches of Fosters by Miller

For SAB Miller, Foster’s was so attractive because it was Australia’s leading brewer with seven of the top 10 beer brands, and buying the company was consistent with Miller’s strategy to spread globally. 

But in recent years, Foster’s hasn’t been managed as well as it could have been in the past, because its executives were distracted by challenges in the company’s wine business, and that gives SAB Miller scope to create shareholder value through improvements, for SAB Miller, the rational for the deal appears to be mainly about running Foster’s better and more efficiently by folding it into the global juggernaut (Thurlow, 2011).

Their initial arrangement limited SAB Miller’s ability to buy shares in Foster’s in its own right. When SAB Miller first approach Foster’s with a takeover offer, Compared with the today’s dollar trading rate, the Aussie dollar was trading about 9% higher at that time (Rogow, 2011). However, Foster’s has recommended that its shareholders reject SAB Miller’s latest takeover bid, saying it “undervalues” the firm, since then SAB Miller has gone hostile, saying it intends to make a second offer, direct to Foster’s shareholders.

Some analysts said there was a chance that the ACCC or Foster’s would require SAB Miller to sell its interest in the joint venture because of the Foster’s acquisition. Currently, through a joint venture with the Coca-Cola subsidiary Pacific Beverages, SBA Miller is expanding the business in Australia. According to the plan, after the proposed acquisition, SAB Miller and Coca-Cola Amatil intend to terminate the joint venture so that SAB Miller will not wholly own both Foster and Pacific Beverage. ACCA announced that Pacific Beverages transformed into an independent beer producer and supplier isn’t likely to cause substantive competition problem.

The attempt by SAB Miller to buy one of Australia’s most famous brands, once marketed with the slogan “Foster, Australian for beer!” could intensify debate over the rising number of foreign takeover bids in Australia. 

Corporate takeover through the public markets (hereinafter "takeover") means the legal act intending to get the control of a public corporation by the means of acquisition of its shares. Takeover and its legal control are both important and complicated. In terms of law, the acquisition must be approved by the ACCC and through the approval of the Foster’s board.

Australia, as a stable and high profit market, according to the takeover of Foster’s, Australia’s largest brewer appears mainly to raise the level of SBA Miller’s profits. Once the deal is reached, both sides were committed to abiding by the stipulations of the contract. If the two sides could not meet the requirements of each other, in case of any dispute, and no settlement can be reached through friendly negotiations, then we can submit the case to an international arbitration organization for arbitration.

4.0 Defensive actions for Fosters

Facing the threats and pressure of “hostile takeover”, Foster’s shareholders will be consider keeping shares and profits from any further rise in the stock or oppose to the acquisition for that the acquirer’s bid does not meet their psychological price. Managers may worry about position change or hope for better treatment. Golden Parachute may caused when management changes, company shareholders including CEO and other existing senior managers, no matter actively or passively resign, they will receive a considerable amount of compensation. In short, anti-takeover would have been flooded in the hostile takeover. As one of the most important defensive measures of hostile acquisitions, poison pill has significant impact on corporate management’s structure and corporate market control. Original Foster’s shareholders may entitled to buy stock of the new company at lower prices after the takeover completed, or have the right to buy shares in target company at low prices, acquirers have to accept dilution of their stock and their voting rights. The effect is like swallowing “poison pills” which is harmful and suffering for acquirers.

As the world’s leading brewer, SAB Miller company owns Miller Lite, Peroni, Grolsch and other brands, Victoria Bitter, Pure Blond and Cascade etc. If the acquisition is successful, the acquisition will become the world’s second largest acquisition in wine industry. Although many industry watchers expected the demerger to lead to multiple bids for Foster’s, no arrival bid to SAB Miller’s emerged, though Foster’s said that would still consider one. SAB Miller, had negotiate with Foster’s on June 20th about the acquisition, and as AU 4.90 per share, SAB expresses its willingness to take over all the shares of Foster (BBC News, 2011), but the proposal was turned off by foster’s on the next day.

Most of the facts has shown that takeovers will bring remarkable premium for the target firm (The Seattle Times, 2011), and the takeover offer for Foster’s Board is attractive, but at the same time, there is a kind of possibility that Foster’ inviting a friendly solid company and sending out competitive offer, forcing hostile acquirers raising the purchase price, increasing the cost of acquisition, and contributed to the friendly company’s acquisition and defeat hostile takeover. In the meantime, rivals with ample cash could buy themselves even more of a head start in the acquisition competition. It is often referred to as a white knight plan.

In addition, by means of legal and administrative, Foster’s as a target company can acquire information disclosure, finding evidence in the acquisition procedures and exploring legal protection. Through national government protection policy to limit the right of acquirers and improve the acquirer’s bid.

Above all, these are the defensive actions that Foster’s might take in different aspects.