NAPA — Australia-based Foster’s Group intends to pursue a demerger of its beer and wine businesses, creating separate stock exchange listings and organizational structures, subject to an evaluation of the issues, costs and benefits. The wine group, Foster’s Wine Estates, is based in Napa.
Potential benefits of the structural separation include the ability to more appropriately value each business over time, greater investment choice and flexibility in development of independent strategies, capital structures and financial policies. Foster’s identified potential issues of financing costs, corporate costs and one-off implementation costs.
No decision has been made on the structure or timing of the demerger, though it’s unlikely to be implemented before the first half of 2011 as it will be subject to all regulatory and statutory approvals.
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