LOEWEN (dpa-AFX) - The Australian government has approved the proposed A$11.5 billion or $11.2 billion deal by British brewer SABMiller Plc (SAB.L, SBMRY.PK) to acquire Australian beer maker Foster's Group Ltd. (FGL.AX, FBRWY.PK). This is the final regulatory approval ahead of the December 1 Foster's shareholder meeting to approve the deal, which requires an OK from 75 percent of the votes.
If approved by shareholders at the scheme meeting, SABMiller continues to expect the acquisition to be completed before the end of 2011.
The Deputy Prime Minister and Treasurer Wayne Swan, on recommendation from the Foreign Investment Review Board or FIRB, has conditionally approved the deal as well as the deal for SABMiller to acquire the remaining 50 percent of Pacific Beverages Pty Ltd. currently owned by Coca-Cola Amatil.
According to the conditions set for the approval, SABMiller agreed to keep Foster's located in Australia under its ownership, and not to relocate Foster's existing brewing facilities offshore that produce beer for Australian domestic consumption. It also agreed to continue investing in Foster's iconic Australian brand portfolio consisting of Victoria Bitter, Carlton Draught, Corona, Crown Lager, Carlton Mid, Carlton Dry and Pure Blonde brand beers.
'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,' SABMiller said in a release.
'I also note SABMiller's current intention that Foster's operational employees will remain in their existing roles on the same or substantially similar conditions to those which they currently enjoy. The Government welcomes foreign investment in Australia and continues to ensure that investments are consistent with Australia's national interest,' Swan said in a statement.
SABMiller agreed on September 21 to buy Foster's for A$5.10 per share, valuing Foster's equity at about A$9.9 billion or around $10.13 billion at that time. Foster's had in June rejected SABMiller's offer for A$4.90 per share in cash or A$9.51 billion, saying that the proposal significantly undervalued the company.
Meanwhile, last week SABMiller was forced to raise its offer by A$0.30 per share as a return of capital to A$5.40 per share as it failed to obtain the ruling from the Australian Tax Office as set out in the Implementation Agreement. However, the amendment does not increase the acquisition enterprise value and does not change the total cash received by each Foster's shareholder, SABMiller noted.
SABMiller is the world's second-largest brewer by volume. The company has brewing and beverage interests across Latin America, Europe, North America, Africa, Asia and South Africa. SABMiller currently operates in Australia through Pacific Beverages, a joint venture with Coca-Cola Amatil, which it will now acquire fully.
Since Foster's announced plans last year to spin off its wine operations, it has been seen as an acquisition target by potential suitors. Earlier, its struggling wine operations that was de-merged in May, were seen as a deterrent for a possible acquisition.
Meanwhile, SABMiller Plc is also in talks to be acquired by larger Belgian rival Anheuser-Busch InBev NV (BUD, AHBIF.PK) for about $80 billion, according to reports in early October. On July 1, SABMiller entered into a distribution agreement with Ertvelde, Belgium-based Van Steenberge brewery to distribute its first Belgian beer in select markets.
SBMRY.PK closed Wednesday's regular trading session at $32.31, down $0.64 or 1.94 percent on a volume of 18,336 shares, and FBRWY.PK closed at $5.12, down $0.08 or 1.54 percent on a volume of 9,392 shares.
SAB.L closed on the LSE at 2,096 pence, down 4.50 pence or 0.21% on a volume of 1.96 million shares.
Meanwhile, in Friday's regular trading session, FGL.AX is trading on the Australian Securities Exchange at A$5.375, up 0.035 or 0.66% on a volume of 93.7806 million shares.
Copyright RTT News/dpa-AFX
