Moody's Investors Service has endorsed SABMiller's $9.5 billion offer for Australia's largest brewer, Foster’s Group (ASX:FGL), believing it could boost earnings for both companies.
Foster’s last week rejected SABMiller’s conditional cash takeover bid, claiming it significantly undervalues the company.
According to Moody’s the takeover would enable SABMiller to enter a profitable cash-generating company and lower its dependence on developing markets, while Foster’s could potentially profit from joining a bigger and higher-rated company.
Moody's says SABMiller has historically been an acquisitive company with a good track record at integrating purchased assets.
If the acquisition proceeds the ratings agency expects it would be credit positive for both companies and offer diversification, scale and cost savings benefits.
Foster’s Group reported an net profit of $313 million in the last half of 2010.
