Lion Nathan (LNN) said today it has entered into an agreement to acquire Tasmanian brewer, J Boag & Son for $325 million from Philippines based San Miguel Corporation.
The deal is subject to regulatory approval and the completion of Kirin Brewery Company's purchase of National Foods (which was also announced today).
Lion Nathan is expected to assume full control of J Boag & Son in early January 2008.
"This is an acquisition offering strong strategic value. Boag's is a company with great brands and a reputation for brewing excellence and its market focus is complimentary to Lion Nathan," chief executive officer Rob Murray said.
J Boag & Son's beer volume consumption in Australia amounts to 63%, while 36% is consumed in Tasmania in addition to a small export volume.
Its sales revenue was A$92 million from production volumes of around 45 million litres, which generated EBITDA of A$17.9 million.
Lion Nathan's chief financial officer, Jamie Tomlinson is confident of this 'strategic acquisition'.
"Boag's strong brand equity and presence throughout Australia in all key market segments makes this a strategic acquisition," he added.
Lion-Nathan Limited is a an alcoholic beverages company that produces, markets and distributes approximately 900 litres of Australia and New Zealand's beer brands annually, together with some of Australia's leading wine and spirit brands.
Lion Nathan was 71st on the list of top 100 companies after the close of the markets on Wednesday, with its local rival Fosters coming in at 29.
The acquisition comes at an interesting time. Coca Cola Amatil is looking to break Lion and Fosters' hold of the local beer market but the incumbents don't look like giving in easily. In fact, Fosters Group this year revealed it will increase spending by more than double on this summer's advertising campaign.
Lion Nathan dipped 31 cents to $8.99.
