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SYDNEY -- Australia's competition watchdog has given the green light for SABMiller to move forward with its proposed acquisition of Foster's Group. The A$9.9-billion takeover of the Australian brewing giant gained speed last week after Foster's board of directors recommended that its shareholders accept the deal.
The Australian Competition and Consumer Commission (ACCC) approved the plan yesterday after determining that it would not hurt competition, according to Reuters. "The proposed acquisition is not likely to result in a substantial lessening of competition for the supply of beer," said Rod Sims, chairman of the ACCC.
This go-ahead is the just the first step in the pact that would merge the two rival brewing companies. SABMiller began its quest to acquire Foster's with an initial A$10.1-billion bid in June. In response, Foster's dismissed the price as too low.
But the rejection did not deter SABMiller. In August, it brought a conditional, off-market A$9.97-billion cash offer directly to Foster's shareholders. In an effort seen as many to thwart this move, Foster's said it would return at least $500 million to its shareholders, perhaps via a share buyback.
The battle for the maker of Foster's and Corona neared an end Sept. 21 when the Foster's board accepted a revamped bid that is estimated to be a cash offer of Aus$5.10 per Foster's share. The shareholders are expected to vote on the proposal in early December.