The 2011 Foster’s Group demerger involved structural separation of a fully integrated business. Corrs successfully navigated complex demerger arrangements which resulted in the creation of the world’s biggest listed stand-alone wine company and the only Australian owned and listed beer company.
Foster’s Group successfully separated its Beer and Wine businesses with the listing of Treasury Wine Estates Limited on the Australian Stock Exchange on 10 May 2011. It represented the largest demerger in 2011.
Foster’s decision to pursue a structural separation was part of the Foster’s Wine Strategic Review, which included implementing stand-alone organisational structures across Beer and Wine with new senior management in those businesses, and re-shaping the Wine portfolio and rationalizing brands.
Foster’s is one of Australia’s most iconic beer brands and the only Australian owned and listed beer company. Following the demerger, the beer, cider and spirit business of Foster’s continues to operate within the existing Foster’s entity listed on ASX with a market capitalisation of approximately A$8.8 billion following the demerger.
The wine business now operates as the newly listed entity, Treasury Wine Estates (TWE), which on listing had a market capitalisation of A$2.1 billion. TWE is now the world's biggest listed stand-alone wine company, and Australia's largest supplier of bottled wine, with four of the top 10 wine brands. The TWE portfolio includes iconic brands such as Penfolds, Lindemans, Wolf Blass and Rosemount.
Corrs advised Foster’s on all aspects of the demerger, including a detailed evaluation of the issues, costs and benefits to Foster’s shareholders.
The demerger also involved complex arrangements to separate a fully integrated business; and complicated structuring required by the changes to the dividend tests and accounting standards on impairments, and because a significant portion of the wine business comprised US assets.
The Corrs team worked from both Sydney and Melbourne. Teams of lawyers and senior associates supported 11 partners involved in various aspects of the matter, coordinating and delivering due diligence, taxation, contractual, IT, workplace relations and other corporate advice.
Corrs’ role on the demerger recognises the firm’s excellent client service and the longstanding relationship between Corrs and Foster’s Group.
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