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ACCC gives nod to Foster's buyout

ACCC gives nod to Foster's buyout

The ACCC has decided not to stand in the way of SABMiller's planned $12.3 billion acquisition of Foster's Group (ASX:FGL).

The regulator has determined that the merger is unlikely to substantially lessen competition for the supply of bulk and packaged beer in the Australian market, Chairman Rod Sims said on Wednesday.

Although the deal will result in the removal of Pacific Beverages - a joint venture between SABMiller and Coca-Cola Amatil (ASX:CCA) - from the Australian market, this is unlikely to raise major competition issues.

“The evidence suggests that Pacific Beverages is not a significant force in the Australian beer market and other competitive constraints will continue to operate on a merged SABMiller/Foster’s,” Sims said.

These include the presence of rivals including Lion Nathan, the second largest player in the Australian beer market, as well as Coopers.

But Sims added that the ACCC's decision-making role differs from that of the foreign investment review board - which is also conducting a review – in a reminder that the deal could still be challenged on national interest grounds.

Foster's directors agreed to a $12.3 billion buyout offer from SABMiller last week. The $5.325 per share bid is an improvement on the initial offer of $4.90, which the board had rejected due to concerns it had undervalued the company.

FGL shares grew 0.38% on Wednesday to $5.300.

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Tags Coca-Cola AmatilRod SimsASX:CCLASX:FGLacccFoster's GroupSABMiller

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