Australian drinks giant Foster's said it planned to split its wine and beer divisions in a long-awaited move that is likely to draw takeover offers as the bloated industry consolidates.
Foster's, owner of Australia's largest brewer Carlton and United Breweries, also said its half-year profits were down 12% as domestic beer sales slumped, especially in the flood-hit state of Queensland.
Foster's reported first-half net profit of $312.1m, down from $355.7m a year earlier.
The demerger, first proposed last May, will result in a new company, Treasury Wine Estates, being listed alongside Foster's on the Australian stock exchange.
'Fosters has completed a detailed evaluation of the issues, costs and benefits of the demerger, and the board unanimously considers that the demerger represents the best path forward and is in the best interests of Foster's shareholders,' chairman David Crawford said.
'The board has formed the view that further benefits will result from a complete separation and now is the right time to pursue a demerger of Treasury Wine Estates from Foster's,' he added.
Foster's, whose wine labels include Wolf Blass and Penfolds, has been hit by a glut of production in Australia, while the soaring local dollar has made exports more expensive for foreign customers. Last year, chief executive Ian Johnston said a quarter of Australia's vines should be destroyed to reduce the oversupply.
The company is also battling intense competition in the beer industry, affecting its flagship brands VB, Crown and Carlton Draught. Foster's estimated the domestic beer market shrank by 7% in the second half of 2010.
