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Asahi drops out of Foster’s beer race

Japanese beverage giant Asahi Breweries has taken itself out of the running to buy Foster's beer arm in the lead up to the historic $11 billion demerger of the Australian brewer.
At an earnings briefing in Japan overnight Asahi President Naoki Izumiya said he had no interest in the beer assets which include a portfolio of leading brands such as VB, Carlton Draught and Cascade.
Foster's shares ended the day down 6 cents, or 1.1 per cent, to $5.68, extending the drop to the past four trading days.
Advertisement: Story continues below "The price is expensive and recently (Australia's) market is looking tough," President Izumiya told reporters after a press briefing in Tokyo.
Last year's decision by the Foster's board to split its beer division from its global wine operation sparked speculation that a rival brewing company would swoop on the beer assets. Asahi and SABMiller were touted as frontrunners for the business.
Japanese brewing and food manufacturers have been particularly interested in buying overseas consumer goods businesses to broaden their exposure outside of their stagnating domestic market.
In 2009 Kirin's launched a $3.5 billion acquisition of Lion Nathan, handing it a range of popular beers and beverages. Also two years ago rival Asahi Breweries bought Schweppes Australia's soft drink operation for $1.185 billion.
But it looks as though Asahi now sees its growth coming from regions other than Australia. In August, Mr Izumiya told Reuters in an interview the company was considering expanding ties with South Korea's top beverage firm Lotte Group and that it wanted to lift its stake in China's Tsingtao Brewery.
Foster's will release its half-year results next week where it is expected to provide further details about its proposed demerger of the beer and wine businesses.
9 Feb. 2011

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