AUSTRALIA’S GOVERNMENT has approved SABMiller’s A$11.5 billion deal to acquire Foster’s Group under foreign acquisitions laws, but imposed conditions requiring the company to keep brewing operations in Australia.
The government approval is the final regulatory hurdle to be cleared ahead of the Foster’s shareholders’ vote, set for December 1st, which is expected to pass the deal.
Treasurer Wayne Swan, who also approved acquisition of the remaining 50 per cent of Pacific Beverages now owned by Coca-Cola Amatil, said SABMiller must keep management of the iconic Australian brand in Australia.
SABMiller must also continue to invest in Foster’s, the maker of Victoria Bitter, Carlton Draught and Pure Blonde, and not shift any of Foster’s existing brewing facilities offshore to produce beer for the Australian domestic market, he said.
“SABMiller has agreed to a number of undertakings which recognise the significance of Foster’s to our economy and to our community, and support Australian jobs,” Mr Swan said.
SABMiller last week raised its cash takeover offer for Fosters to A$5.40 a share to make up for the loss of a 30 cents capital return after a tax ruling from Australian authorities. The move made no difference to the total enterprise value of the deal, including debt.
The takeover requires approval of 75 per cent of votes at next week’s egm and has wide support from institutional investors.
SABMiller said the undertakings it had agreed with the Australian government on the takeover of Foster’s were consistent with its plans for the business.
“Given the local nature of Foster’s brewing business and its focus on Australian customers, these undertakings are consistent with our current intentions for the business and will not affect our ability to integrate Foster’s and PacBev or to compete effectively in Australia,” the UK-based brewer said.
SABMiller expects its biggest takeover deal to close by the end of the year and put it at the head of the Australian beer market with a near-50 per cent share.
Shares in Foster’s traded at A$5.38, reflecting expectations the deal will complete before year end. – (Reuters)
