Molson Coors Takes Interest in Australia's Foster's

North American brewer Molson Coors Brewing has emerged as the holder of a minority interest in Foster's Group, Australia's biggest brewer said on Thursday.

The maker of Coors Light and Molson Canadian beer acquired the 5 percent interest via Deutsche Bank, whose recent appearance on Foster's share register had fuelled talk that international brewers were circling the Australian beer and wine group.

Foster's, which is deciding the fate of its troubled wine unit, said it had discovered the interested party behind Deutsche's stake from comments made when Molson Coors released its third-quarter profit report on Wednesday.

"We have not been informed about their interest, the precise extent of their interest or their intentions," said a Foster's spokesman. He said Foster's had nothing further to add.

Molson Coors said the economic exposure to a nearly 5 percent stake in Foster's was acquired through a cash-settled total return swap arranged in Australia by Deutsche Bank.

"This is an interesting market we've been studying for some time and we viewed this as an attractive opportunity," said Molson Chief Executive Peter Swinburn in a results briefing.

Foster's has a 52 percent share of the beer market in Australia but is grappling with the fate of its troubled wine unit, whose brands include Rosemount and Penfolds. A decision on the wine division is due in early 2009.

More From CNBC.com ...

• Slideshow: Top 20 Beer Drinking Countries
• Pros on Stocks: Tech, Retail, Beer & More
• More Asia Pacific News

Molson Coors, which recently merged its U.S. operations into a joint venture with SABMiller to form MillerCoors, said that given Foster's was potentially in a period of change, it would continue to review its position.

"I would caution that we could take the view that we keep, we stay where we are, we might move forward or we might move backwards and out," said Swinburn. "Whatever we do will be in the best interest of our shareholders."  

Foster's shares were up 1.4 percent at A$5.93 in morning trade as the broader market dropped almost 4 percent.

Copyright 2008 Reuters. Click for restrictions.