City & Corporate: Capital to handle Foster's wine work

Australian brewer Foster's is using Capital MS&L in Europe after becoming the world's second-biggest winemaker last week.

Capital is co-ordinating a team of Publicis Groupe companies promoting Foster's acquisition of Southcorp, the Australian company that owns the Rosemount Estate and Lindemans wine brands.

Though primarily known for its eponymous lager, Foster's wants to push its expanded scale and brand portfolio to the financial press and European investors, who make up 23 per cent of the company's shareholder base.

The four-month, £1.3bn takeover battle surprised shareholders - the previous summer Foster's had told investors it would not make any big acquisitions.

It had been expected to return cash to shareholders following its £353m sale of property business Lensworth last year.

Market watchers initially saw the move as partly designed to block Constellation Brands, the world's biggest winemaker, which bought Australian firm BRL Hardy for £417m in 2003.

Constellation has also approached FTSE 100 rival Allied Domecq, which recently agreed a merger with Pernod Ricard (PRWeek, 29 April).

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