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Sunday, 7 January, 2001, 12:00 GMT
Foster's silent on Diageo 'bid'
Beer being served in a pub
Foster's is the UK's number two beer with 8.2% of the market
Australia's Foster's Brewing Group has declined to comment on reports that the UK-based drinks giant Diageo is planning to launch a 4bn ($6bn) takeover of it.

"We're not aware of this [possible bid] and as such we're not making any comment," Foster's spokesman Graeme Willersdorf said.

The UK's Observer newspaper had on Sunday reported Diageo was considering the bid to strengthen its Guinness brewing division.

Foster's, best known for its lager beer brand, also has major wine operations which might interest Diageo after its acquisition in December, with France's Pernod Ricard, of Seagram's wines and spirits business.

Dramatic blocking

News of a further possible shake-up in the drinks sector follows last week's dramatic blocking by the UK government of Belgian Interbrew's takeover of Bass Brewers.

Trade & Industry Secretary Stephen Byers had rejected the takeover because it would take Interbrew/Bass's market share over 30%, leading, he said, to less competition and higher beer prices for consumers.

The decision was strongly criticised by the Belgian government which said the way was now open for Interbrew/Bass's biggest rival in the UK, Scottish & Newcastle, to benefit.

S&N, which acquired France's Kronenbourg last year for 1.7bn, also holds the licence to brew Foster's in the UK and continental Europe.

Foster's is the UK's number two beer brand with more than 1bn in sales a year and 8.2% of the market.

Whitbread sell off?

Industry sources said any sale of Bass by Interbrew would be likely to attract the interest of other major world brewers including Netherlands-based Heineken and South African Breweries.

Diageo is not thought to be interested in Bass, prefering to concentrate on global beer brands.

If it was set on retaining Bass, Interbrew's options might include selling off the Whitbread Beer Company, which it also bought last year.

A further possibility is a legal challenge to the blocking of the Bass takeover.

Industry sources said Diageo had also approached S&N in mid-2000 about buying the Foster's licence but had been rebuffed.

Foster's also declined to comment on this.

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See also:

05 Jan 01 | Business
Belgians bitter at Interbrew snub
03 Jan 01 | Business
What now for Bass beer brands?
03 Jan 01 | Business
Bass takeover blocked
19 Dec 00 | Business
Seagram splits drinks empire
04 Jan 01 | Business
Drinks giants eye Premiership deal
05 Dec 00 | Business
Kronenbourg boosts S&N
01 Dec 00 | Business
Interbrew shares rise on debut
17 Jul 00 | Business
Diageo confirms Pillsbury sale
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