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SABMiller plc to make takeover offer for Foster’s Group Limited at A$4.90 per share

17 August 2011

The Offer

SABMiller plc ("SABMiller") proposes, through its indirect wholly owned Australian subsidiary SABMiller Beverage Investments Pty Ltd ("Bidder"), to make a conditional, off-market, cash takeover offer for all of the issued shares in Foster's Group Limited ("Foster's") at A$4.90 per fully paid ordinary share, reduced by the amount of any dividend or distribution paid or declared by Foster's after today's announcement (the "Offer").

The Offer will extend to all the partly paid ordinary shares in Foster's. The price under the Offer for each partly paid ordinary share will be A$4.90 in cash less any amount unpaid on the relevant partly paid share, reduced by the amount of any dividend or distribution paid or declared by Foster's after the date of this announcement, subject to a minimum price of A$0.01.

The Offer will be subject to the fulfilment of a number of conditions, many of which are customary in a change of control situation.  The proposed Offer conditions are set out in the annexure to today's announcement.

Background

On 20 June 2011, SABMiller approached Foster's with a confidential proposal to acquire all of the ordinary shares in Foster's by way of a Foster's recommended scheme of arrangement at A$4.90 per share in cash.  On 21 June 2011, Foster's announced that it had rejected the SABMiller proposal.

SABMiller believes that the proposal put to the Foster's Board is attractive and should be put to Foster's shareholders.  As there has been no willingness to engage in relation to SABMiller's proposal on the part of the Foster's Board, SABMiller has decided to make an offer to Foster's shareholders directly.

Funding

The consideration payable under the Offer will be funded through a combination of existing resources and new debt committed by a number of financial institutions.

Advisers                                                              

SABMiller is being advised by J.P. Morgan, Moelis and Company, RBS and Morgan Stanley.  Legal advisers to SABMiller are Allen & Overy and Hogan Lovells International LLP.

Next steps

Detailed information in relation to the Offer will be set out in a Bidder's Statement to be lodged with the Australian Securities and Investments Commission ("ASIC") and provided to Foster's

and the Australian Securities Exchange ("ASX") shortly. SABMiller expects to mail the Bidder's Statement to Foster's shareholders approximately two weeks after it is provided to Foster's.

Ends

Enquiries

SABMiller Media Relations
Nigel Fairbrass / Beth Longcroft
Tel: +44 20 7659 0115 / Tel: +44 20 7659 0172

SABMiller Investor Relations
Gary Leibowitz / Henry Rudd
Tel: +44 20 7659 0119 / Tel: +44 20 7659 0159

Financial Dynamics - UK
John Waples: +44 7717 814 520
Jonathon Brill: +44 7836 622 683

Financial Dynamics - Australia
Jim Kelly: +61 412549083
Lauren Thompson: +61 438954729

About SABMiller plc

SABMiller plc is one of the world's largest brewers with brewing interests and distribution agreements across six continents. The group's wide portfolio includes global brands such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch, as well as leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. The group is also one of the world's largest bottlers of Coca-Cola products.

In the year ended 31 March 2011, the group reported US$5,617 million adjusted EBITDA (defined as EBITDA before cash flows from exceptional items plus dividends received from the MillerCoors joint venture) and group revenue of US$28,311 million.  SABMiller plc is listed on the London and Johannesburg stock exchanges and has an American Depositary Receipt programme sponsored by the Bank of New York Mellon.

This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of SABMiller plc (the "Company") or any of its affiliates in any jurisdiction or an inducement to enter into investment activity.

This announcement may include "forward-looking statements". These statements may contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's products and services) are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Any information contained in this announcement on the price at which the Company's securities have been bought or sold in the past, or on the yield on such securities, should not be relied upon as a guide to future performance.


Annexure

1.  Proposed Offer conditions

(a)  Minimum acceptance

At or before the end of the Offer Period, Bidder has a relevant interest (as defined in the Corporations Act 2001 (Cth) ("Corporations Act")) in such number of Foster's Shares which represents at least 90% of the aggregate of all the Foster's Shares on issue and becomes entitled to compulsorily acquire all outstanding Foster's Shares under Part 6A.1 of the Corporations Act.

(b)  FIRB approval

Before the end of the Offer Period, the Treasurer of the Commonwealth of Australia ("Treasurer"):

(i) ceases to be empowered to make an order under the Foreign Acquisitions and Takeovers Act 1975 (Cth) in relation to the proposed acquisition by Bidder of up to all of the Foster's Shares under the Offer or any other means permitted by the Corporations Act and the proposed acquisition by a member of the SABMiller Group of all the shares in Pacific Beverages Pty Limited ("PacBev") it does not already own; or

(ii) gives written advice of a decision by or on behalf of the Treasurer stating unconditionally that there is no objection to the proposed acquisition by Bidder of up to all of the Foster's Shares under the Offer or any other means permitted by the Corporations Act and the proposed acquisition by a member of the SABMiller Group of all the shares in PacBev it does not already own.

(c)  No objection from ACCC

Bidder receives unconditional written notification from the Australian Competition and Consumer Commission ("ACCC") to the effect that it does not propose to oppose or otherwise intervene in or seek to prevent Bidder's acquisition of Foster's Shares under the Offer or any other means permitted by the Corporations Act and the acquisition by a member of the SABMiller Group of all the shares in PacBev it does not already own.

(d)  All other regulatory approvals

Before the end of the Offer Period:

(i) all applicable regulatory waiting periods (including any extensions) have expired or otherwise been terminated in respect of the Offer and Bidder (or another member of the SABMiller Group) has obtained on an unconditional basis all approvals, licences, authorisations, authorities, consents, permissions, clearances, grants, confirmations, orders, exemptions, waivers or rulings (together "Approvals") required by law or by any Authority as are necessary:

(A) to permit the Offer to be lawfully made to and accepted by Foster's Shareholders;

(B) to permit completion of the Offer;

(C) as a result of the Offer or the successful acquisition of Foster's Shares and are necessary for the continued operation of the Foster's Group and the SABMiller Group substantially on the same terms as the relevant business was conducted at the Announcement Date;

(D) to ensure that there is no right or power to require the divestiture by any member of the SABMiller Group of any Foster's Shares or material assets, or the divestiture of any material assets of Foster's or any subsidiary of Foster's; or

(E) to permit the proposed acquisition by a member of the SABMiller Group of all the shares in PacBev it does not already own,

and all such Approvals remain in full force and effect as at the end of the Offer Period; and

(ii) the Personal Property Securities Regulations 2010 (Cth) are amended to the effect that section 32(1)(a) of the Personal Property Securities Act 2009 (Cth) does not apply to the compulsory acquisition of securities under Part 6A.1 or 6A.2 of the Corporations Act.

(e)  No regulatory intervention

Before the end of the Offer Period:

(i) there is not in effect any preliminary or final decision, order or decree issued by an Authority; and

(ii) no application is made to any Authority (other than by Bidder or its related bodies corporate), or action or investigation is announced, threatened or commenced by an Authority in consequence of or in connection with the Offer,

(other than an application to or a determination by ASIC or the Takeovers Panel in the exercise of the powers and discretions conferred by the Corporations Act), which restrains, impedes or prohibits (or if granted could restrain, impede or prohibit), or otherwise materially adversely impacts upon, the making of the Offer, the acquisition of Foster's Shares under the Offer or any transaction contemplated by the Bidder's Statement (including implementation of Bidder's intentions expressed in the Bidder's Statement), the Offer or the rights of Bidder in respect of Foster's, or the proposed acquisition by a member of the SABMiller Group of all the shares in PacBev it does not already own, or requires the divestiture by any member of the SABMiller Group of any Foster's Shares or material assets, or the divestiture of any material assets of Foster's or any subsidiary of Foster's.

(f)  No material adverse change

Between the Announcement Date and the end of the Offer Period, no matter, event, change, condition, circumstance, information or thing ("Change(s)") occurs, is announced, becomes likely to occur or becomes known to Bidder (in any such case, individually or when aggregated with all such Change(s) and whether or not becoming public) that discloses (or could reasonably be inferred from the disclosure that), would result in and/or would reasonably be likely to result in:

(i) the value of the consolidated net assets of the Foster's Group being reduced by at least A$250 million against what they would reasonably have been expected to have been but for the Change(s) (as the case may be);

(ii) a reduction of the consolidated net profit after tax of the Foster's Group by an amount of A$50 million or more from what it would reasonably have been expected to have been but for the Change(s) (as the case may be); or

(iii) a material adverse effect on the business, assets, liabilities, financial position or performance, profitability or prospects of the Foster's Group taken as a whole.

(g)  Conduct of Foster's business

Other than as specifically disclosed by Foster's to ASX prior to the Announcement Date, between the Announcement Date and the end of the Offer Period, no member of the Foster's Group:

(i) increases the remuneration of, pays any bonus or termination or retention payments (other than in accordance with existing contractual entitlements as at the Announcement Date) to, or otherwise enters into new or varies the employment arrangements with any of the Foster's directors or any of the employees of the Foster's Group whose total annual employment cost exceeds or could exceed A$250,000;

(ii) issues, grants or amends the terms of any securities, options or rights to, or accelerates the rights of, any of the employees of the Foster's Group to compensation or benefits of any kind (including under an employee or director share, option or incentive plan and including by vesting any outstanding performance rights), in each case otherwise than if necessary to satisfy the condition in paragraph (k) or any Foster's Shares issued (or rights granted under the Long Term Incentive Plan) prior to the date set by Bidder under section 633(2) of the Corporations Act in the ordinary course of business and consistent with past practices under any employee or director share, option or incentive plan;

(iii) acquires (including without limitation by making takeover offers under Chapter 6 of the Corporations Act), or disposes of, one or more companies, trusts, businesses, assets, securities or shares (or any interest or economic interest in one or more companies, trusts, businesses, assets, securities or shares) for an amount in aggregate greater than A$100 million;

(iv) enters into any agreement, joint venture, asset or profit share, partnership or commitment which would require expenditure, or the foregoing of revenue, by the Foster's Group of an amount which is, in aggregate, more than A$100 million, other than in the ordinary course of business;

(v) borrows an amount or amounts or incurs financial indebtedness in aggregate in excess of A$100 million;

(vi) enters into, amends, terminates or waives or otherwise foregoes rights under any Material Contract;

(vii) makes any changes to its constitution or passes any resolution of shareholders;

(viii) has any claim or claims made or threatened against it, or litigation, arbitration proceedings, prosecution or other legal proceedings commenced against it, involving in aggregate more than A$100 million;

(ix) waives or compromises any claim or right otherwise than in the ordinary course of business; or

(x) resolves, agrees, offers, commits or announces an intention to do any of the things referred to in paragraphs (i) - (ix) above.

(h)  Restriction on distributions

Between the Announcement Date and the end of the Offer Period, Foster's does not announce, make, declare or pay any dividend or other distribution (whether in cash or in specie), other than a cash dividend not exceeding 15.25 cents per Foster's fully paid share (and a corresponding dividend on Foster's partly paid shares required by the constitution of Foster's) reflecting the proposed final dividend of Foster's for the year ended 30 June 2011 as outlined in paragraph 7.13(c) of the Foster's Demerger Booklet dated 17 March 2011.

(i)  No prescribed occurrences between the date of the Bidder's Statement and the end of the Offer Period

None of the following events happen in the period between the date of the Bidder's Statement and the end of the Offer Period:

(i) Foster's converting all or any of its shares into a larger or smaller number of shares under Section 254H of the Corporations Act;

(ii) Foster's or a subsidiary of Foster's resolving to reduce its share capital in any way;

(iii) Foster's or a subsidiary of Foster's entering into a buyback agreement or resolving to approve the terms of a buyback agreement under Section 257C(1) or 257D(1) of the Corporations Act;

(iv) Foster's or a subsidiary of Foster's issuing any shares or granting an option over its shares or agreeing to make such an issue or grant such an option except if necessary to satisfy the condition in paragraph (k) or any Foster's Shares issued (or rights granted under the Long Term Incentive Plan) prior to the date set by Bidder under section 633(2) of the Corporations Act in the ordinary course of business and consistent with past practices under any employee or director share, option or incentive plan;

(v) Foster's or a subsidiary of Foster's issuing, or agreeing to issue, convertible notes;

(vi) Foster's or a subsidiary of Foster's disposing, or agreeing to dispose, of the whole, or a substantial part, of its business or property;

(vii) Foster's or a subsidiary of Foster's charging, or agreeing to charge, the whole, or a substantial part, of its business or property;

(viii) Foster's or a subsidiary of Foster's resolving to be wound up;

(ix) the appointment of a liquidator or provisional liquidator of Foster's or a subsidiary of Foster's;

(x) the making of an order by a court for the winding up of Foster's or a subsidiary of Foster's;

(xi) an administrator of Foster's or a subsidiary of Foster's being appointed under section 436A, 436B or 436C of the Corporations Act;

(xii) Foster's or a subsidiary of Foster's executing a deed of company arrangement; or

(xiii) the appointment of a receiver, or a receiver and manager in relation to the whole, or a substantial part, of the property of Foster's or a subsidiary of Foster's.

(j)  No prescribed occurrences between the Announcement Date and the date of the Bidder's Statement

Between the Announcement Date and the date of the Bidder's Statement, none of the occurrences listed in paragraph (i) above happened.

(k)  Foster's partly paid shares and employee or director share option or incentive plans

Before the end of the Offer Period all restrictions on transfer or vesting of:

(i) any Foster's partly paid shares;

(ii) any other Foster's Shares issued or held under any employee or director share, option or incentive plan; and

(iii) any rights to be issued Foster's Shares under any employee or director share, option or incentive plan,

are waived or otherwise removed (provided that any restrictions relating to repayment of loans, and any loans made by any Foster's Group companies, shall not be waived or forgiven), or in respect of rights, the rights are cancelled for consideration no higher than the net benefit to the director or employee had the rights been exercised and the Offer accepted.

(l)  Index out

During the period from the Announcement Date to the end of the Offer Period, the S&P/ASX 200 Index does not fall below 3,500 at any time on an ASX trading day.

(m)  Material contracts

Before the end of the Offer Period:

(i) every person who, as a result of the making of the Offer, the acquisition of Foster's Shares by Bidder, the change in control or delisting of Foster's if the Offer is successful, or the proposed acquisition by a member of the SABMiller Group of all the shares in PacBev it does not already own, is or will be entitled or states an intention (in all cases whether absolutely or contingently) to exercise or asserts (whether absolutely or contingently) any right under any provision of any contract or understanding to which a Foster's Group company is a party or is bound to:

(A) terminate, vary the terms of or accelerate the performance of obligations under a Material Contract;

(B) acquire or require the disposal of or alter the terms of investment in any company, business, trust, asset or share (or any interest in one or more companies, businesses, assets, trusts or shares) held by the Foster's Group with a value of more than A$100 million in aggregate or which is otherwise material in the context of the businesses of the Foster's Group; or

(C) require the repayment, immediately or earlier than the repayment date would otherwise have been, of any moneys borrowed by any member of the Foster's Group,

provides to the relevant Foster's Group company and to Bidder in writing a binding, irrevocable and unconditional waiver or release of that right; and

(ii) the Target's Statement contains a statement, expressed to be made with approval of Foster's directors after due enquiry:

(A) if there is any such contract or understanding referred to in paragraph (i) above, setting out details of that contract and relevant rights or clauses, and the impact of such rights or clauses on the Foster's Group annual earnings before interest, tax, depreciation and amortisation; or

(B) if there is no such contract or understanding, confirming that fact.

(n)  Taxation matters

(i) Neither Foster's nor any member of the Foster's Group has at any time prior to the end of the Offer Period entered into any enforceable agreement(s) that prevent the use of its tax losses existing as at the end of the Offer Period as a deduction from its assessable income arising in prior years.

(ii) The Target's Statement contains a statement, expressed to be made with the approval of Foster's directors, after due enquiry, confirming that no agreement referred to in subparagraph (i) above has been entered into.

2.  Definitions

The meanings of the terms used in this Annexure are set out below, unless the context otherwise appears or requires.

Announcement Date means 17 August 2011.

Authority means:

(a) any government or governmental, semi-governmental or local authority and any department, office, minister, commission, board, delegate or agency of any such government or authority;

(b) any judicial or administrative entity or authority; and

(c) any other authority, commission, board, agency or other entity established or having power under statute or the rules of any recognised securities exchange.

Demerger Documents means all documents entered into by Foster's or any subsidiary of Foster's in connection with the demerger of Treasury Wine Estates Limited by Foster's.

Foster's Shares means ordinary shares (whether fully paid or partly paid) issued in the capital of Foster's.

Material Contract means any agreement, contract or other arrangement or instrument to which any member of the Foster's Group is a party, or by or to which any member of the Foster's Group or any of its respective assets may be bound or subject to, and which:

(a) is a Demerger Document;

(b) imposes obligations or liabilities on any party of at least A$30 million per annum or A$100 million over the life of the agreement, contract or other arrangement;

(c) restricts the ability of any member of the Foster's Group or any person who controls Foster's from engaging in or competing with any business in any place; or

(d) is otherwise material in the context of the businesses of the Foster's Group, and includes any agreement, contract or other arrangement under which any member of the Foster's Group borrows or raises funds from any source or otherwise incurs indebtedness from a financial institution.

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