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Fosters Demerger - Beer and Wine rarely mix!

Geoff Riley

26th May 2010

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If you are looking for a terrific example of a demerger for the unit 3 economics exam paper (i.e. to help evaluate the risks from aggressive acquisition strategies etc) Here’s an excellent, topical example to use. Fosters Group is to de-merge its two main operating divisions. One, the second largest wine producer in the world, is to be given its own stock market listing.

This BBC video explains the background to the decision.

This article in the Telegraph provides more background information on why Fosters believe that allowing its wine operations to trade as a separate quote business is the right strategy for shareholders.

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Geoff Riley

Geoff Riley FRSA has been teaching Economics for nearly forty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD and Revision conferences in the UK and overseas.

@tutor2uGeoff

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