SABMiller said to be mulling a $10.9 billion bid for Fosters Group

SABMiller plc, one of the world's largest brewers, is reportedly mulling a $10.9 billion acquisition of Fosters Group Ltd, the beer making arm of Australia's largest brewing company Carlton and United Breweries (CUB).

With Sunday Times yesterday reporting that SABMiller was mulling buying Fosters, shares of the Melbourne-based company shot up by 7.6 per cent, or 44 cents, to A$6.26 in today's closing to raise its market value to nearly $11 billion.

London-listed SABMiller is likely to make an offer for Fosters to Carlton and United Breweries division, the UK paper reported yesterday without disclosing the source of its information.

Fosters responded to market reports today by saying that it is not aware of any announced information that may explain today's share price change and trading activity.

Foster's Group, the world's second-largest wine maker by sales and Australia's largest brewer, had said in May 2010 that it would split its struggling wine division from its profit making beer unit into two separate listed companies by mid-2011.

CUB said that it intends to pursue a structural separation to create separate stock exchange listings for Beer and Wine, subject to a detailed evaluation of the issues, costs and benefits to Foster's shareholders and ongoing assessment of prevailing economic and capital market conditions.

Australia's biggest brewer has been struggling to turn around the fortunes of its wine division writing down $278 million for vineyards, brands and inventory in its last annual results.