Breakingviews-Foster's bid poses big FX risks for SABMiller

Thu Jun 30, 2011 2:24pm IST

By John Foley

HONG KONG, June 30 (Reuters Breakingviews) - The $12 bln approach for the Australian brewer comes as the Aussie dollar rides high. Bidder SABMiller can hedge the risks, but only to a point. A shifting currency could wreak havoc on a deal’s financial logic -- or on Foster’s investors’ willingness to accept it.

Full view will be published shortly.

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CONTEXT NEWS

-- Breakingviews calculator determines how much SABMiller can afford to pay if the deal is to cover its cost of capital: here

-- Reuters story: SABMiller play for Foster's expected to drag on for months [ID:nLDE75M082]

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(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

-- For previous columns by the author, Reuters customers can click on [FOLEY/]

(Editing by Chris Hughes and David Evans)

((john.foley@thomsonreuters.com)) Keywords: BREAKINGVIEWS SABMILLER/FOSTERS

(C) Reuters 2011. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.

By John Foley

HONG KONG, June 30 (Reuters Breakingviews) - The $12 bln approach for the Australian brewer comes as the Aussie dollar rides high. Bidder SABMiller can hedge the risks, but only to a point. A shifting currency could wreak havoc on a deal’s financial logic -- or on Foster’s investors’ willingness to accept it.

Full view will be published shortly.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Get Breakingviews alerts directly to your inbox three times a day. To sign up click here: here

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

CONTEXT NEWS

-- Breakingviews calculator determines how much SABMiller can afford to pay if the deal is to cover its cost of capital: here

-- Reuters story: SABMiller play for Foster's expected to drag on for months [ID:nLDE75M082]

RELATED COLUMN

Green light for amber nectar [ID:nL3E7HL18Y]

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

-- For previous columns by the author, Reuters customers can click on [FOLEY/]

(Editing by Chris Hughes and David Evans)

((john.foley@thomsonreuters.com)) Keywords: BREAKINGVIEWS SABMILLER/FOSTERS

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