Lion Hastens Deal On Boag's

The Age

Thursday January 3, 2008

Jesse Hogan

BREWER Lion Nathan will pay $6.4 million to ensure its newest beer brand, Boag's, will no longer be distributed by the company's biggest rival, Foster's.

Lion's eight-week wait on its application to buy premium Tasmanian brewer J. Boag & Son from San Miguel Corporation ended yesterday when the Foreign Investment Review Board confirmed it would not intervene in the $325 million deal.

The Australian Competition and Consumer Commission had previously cleared the takeover.

One complication for Lion was that Foster's was contracted to distribute Boag's beer in mainland Australia until June, but the companies negotiated for the change to be brought forward to later this month.

Lion's commercial director for Australia, James Brindley, said there was a "real sense of excitement in our business about the opportunity to further grow the J. Boag & Son brands".

"The fact that we will be able to begin distributing the J. Boag & Son portfolio later this month is a real plus and certainly accelerates the integration process," Mr Brindley said.

When the deal was announced, Lion chief executive Rob Murray said in-house distribution of Boag's beers - which include Boag's Premium and Premium Light, St George and Classic Blonde - would improve the business' profit margin.

He also said Lion, owner of the Tooheys brands, wanted to encourage more pubs to serve Boag's beers on tap.

Three Boag's executives - managing director Pat Riley, sales and marketing director Lyndon Adams and brewing director Richard Benwell - will quit the company following the takeover. Lion said each of them had "agreed consultancy arrangements until September to ensure a smooth integration".

Lion shares rose 1? to $9.62.

The Boag's sale completes San Miguel's exit from Australia. Last week the Philippine company sold its major Australian division, National Foods, to Japanese brewer Kirin for $3.1 billion, although both agreements were confirmed concurrently in early November.

© 2008 The Age

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