Under the terms of the agreement, which is subject to certain conditions being fulfilled, SabMiller will assume ownership of all Foster's assets in India including the Foster's brand in the territory.
''This transaction enhances our existing portfolio in India and provides us with an exciting opportunity to further increase our premium brand offering. With SabMiller's extensive footprint throughout the subcontinent, complemented by Foster's share of Maharashtra and the Mumbai market, India remains a principal growth market for SabMiller,'' SabMiller Africa and Asia MD Andre Parker said.
Foster's India currently operates one brewery based in Aurangabad, Maharashtra, with a licenced annual capacity of 350,000 hectolitres (hl), and produces, distributes and supports Foster's Lager, Amberro Mild and Amberro Strong beer brands in the Indian market.
SabMiller India will extend Foster's Lager nationally, through its network of ten breweries and seek significant cost benefits from brewing and distributing the brand locally.
The Aurangabad brewery will also provide additional capacity for SabMiller's presence in Maharashtra as well as a platform for access to the Mumbai market.
Total beer sales in the country were 236,000 hl in the year ended 30 June 2006, as against 209,000 hl last year, of which Foster's Lager commanded 88 per cent of total production and sales, as against 85 per cent last year.
India is the third largest market for the Foster's brand globally, and has achieved a Compund Annual Growth Rate (CAGR) of 13 per cent since it commenced operations in 1998.
It has a presence in 19 states, and a substantial share of the mild beer segment comes from the strategic state of Maharashtra.
SabMiller India's brand portfolio includes Royal Challenge, Haywards 5000, Castle and the recently launched Haywards Black -- India's first stout beer.
The company was formed in 2002 by the merger of South African Breweries and Miller Brewing, and is one of the world's largest brewers with distribution agreements in over 60 countries across five continents.
In the year ended 31 March 2006, the group reported a turnover of 15,307 million dollars.
The Australia-based Foster's Group is a leading global drinks company, with a portfolio of wine, beer, spirits, ready-to-drinks, ciders, and non-alcohol brands.
With annual revenues of four billion dollars annually, Foster's Group employs over 10,000 people in production, sales and marketing offices in Australia, North America, Europe, and Asia.