Foster's Group, Australia's largest brewer, yesterday named Ian Johnston as chief executive, a move likely to speed up a decision on the fate of the company's troubled A$5 billion ($6.21 billion) wine business.
The appointment of Johnston, who has been acting CEO since July, avoids the risk of
having the search for an outsider delay the review of the wine business, which has long been a drag on Foster's earnings.
"Ian has had an opportunity to get across the business during his time as acting CEO and will hit the ground running," the Melbourne company's chairman, David Crawford, said yesterday.
Fortis Investment Partners analyst Theo Maas said: "It is a bit of surprise they have come out already with this announcement. They clearly want to go full steam ahead [with the review].
"Given that Johnston hasn't been involved in wine, it is probably easier for him to make the decision to either de-merge or sell parts of or the whole of the wine business.
"He is definitely a pair of fresh eyes."
Foster's wine business, the world's second largest after Constellation Brands, accounting for about 35 per cent of total revenues, has been a drag on earnings since the 2005 A$3.7 billion acquisition of producer Southcorp.
There is unlikely to be a single buyer because of an oversupply of wine assets on the market.
The review could lead to the sale of some brands or vineyards in Australia or California, or a separate stock market listing, analysts have said.
Johnston is a former managing director of global confectionery for Cadbury Schweppes.
Foster's last chief executive, Trevor O'Hoy, resigned in June as the company slashed its profit forecasts, took writedowns on its wine business of A$700 million and announced the wine review.
O'Hoy had led the purchase of Southcorp.
- AGENCIES
