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SYDNEY -- Two months after SABMiller prevailed in its bid to buy Foster's Group Ltd. The Australian government gave its stamp of approval to the deal.
The government approved the Aus$11.2-billion deal under foreign acquisitions laws on Friday, Nov. 25. However, officials imposed conditions requiring the company to keep brewing operations in Australia, according to Reuters. The green light was the final regulatory condition to be met before Foster's shareholders meet on Dec. 1. The shareholders are expected to vote in favor of the sale.
The takeover requires approval of 75 percent of the votes meeting and has wide support from institutional investors.
Treasurer and Deputy Prime Minister of Australia Wayne Swan said SABMiller must keep management of the iconic Australian beer brand in the country. 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 recognize the significance of Foster's to our economy and to our community, and support Australian jobs," Swan said in a statement.
SABMiller last week raised its cash takeover offer for Foster's to A$5.40 per share to make up for the loss of a 30-cent capital return after a tax ruling from Australian authorities. The move made no difference to the total enterprise value of the deal, including debt, according to the news report.
The Fosters deal is part of SABMiller's strategy of creating an attractive global spread of businesses to add to operations largely in the emerging markets of Africa, Latin America, Asia and Eastern Europe, but also in the United States.
Its battle for Foster's began this past summer when SABMiller launched a hostile takeover attempt. The initial $10.1-billion offer in June, which Foster's dismissed as too low. SABMiller's push for the company took another turn in August when the company made a conditional, off-market $9.97-billion cash offer to Foster's shareholders. In response, Foster's attempted to thwart the bid by announcing it would return at least $500 million to its shareholders, perhaps via a share buyback.
The two sides finally came an agreement in September when SABMiller came to the table with an improved cash offer, as CSNews Online previously reported.