The ACCC concluded that the acquisition was not likely to substantially lessen competition in the Australian market for the supply of bulk and packaged beer. This is according to a statement posted on the Commission's website.
"The ACCC has formed the view that the proposed acquisition was not likely to result in a substantial lessening of competition for the supply of beer," ACCC Chairman Rod Sims said.
The ACCC carried out a comprehensive review, involving extensive market inquiries with a range of interested parties in the beer industry, including competing breweries, supermarket retailers, distributors, licensed venues and bottle shops.
SABMiller currently operates in Australia through Pacific Beverages, a joint venture with Coca-Cola Amatil. After the proposed acquisition, SABMiller and Coca-Cola Amatil intend to terminate the joint venture so that SABMiller will wholly own both Foster's and Pacific Beverages.
The ACCC considers that the removal of Pacific Beverages as an independent beer producer and supplier would be unlikely to raise substantial competition concerns, it said.
"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," said Sims.
Post acquisition, the merged firm will continue to face competition from Lion Nathan, the second largest player in the Australian beer market.
Last week SABMiller announced it had agreed with Foster's a recommended cash offer to Foster's shareholders at AUS$5.10 per share, which values Foster's equity at approximately A$9.9 billion.
This represented an acquisition enterprise value of A$11.5 billion, which was a 2.8% increase on the enterprise value of A$11.2 billion implied by SABMiller's initial proposal announced on 21 June 2011.
SABMiller has said the acquisition was consistent with its strategic priorities and would provide it with exposure to Australia's strong economic growth prospects, and a leading position in the stable and profitable Australian beer industry, as well as the opportunity to apply SABMiller's capabilities and scale to improve Foster's financial and operating performance.
The acquisition was expected to be earnings per share enhancing for SABMiller in the first full year of ownership, the brewer said.
SABMiller and Foster's agreed that the offer would be effected by means of a scheme of arrangement to be proposed by Foster's to its shareholders.
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