British-based brewer SABMiller says it expects its takeover of Australian beer giant Foster's to be completed before the end of this year.
Foster's Group, whose leading lager brands include Foster's and Corona, had in August rejected a hostile bid of from SABMiller, which produces rival beers Miller Lite and Grolsch.
But on Wednesday its board accepted an improved offer.
"We are pleased that we have reached agreement on a recommended transaction to be put to Foster's shareholders," SABMiller chief executive Graham Mackay said in a statement on Wednesday.
"We look forward to working with Foster's employees and other stakeholders to ensure the success of Foster's in the future as the largest brewer in Australia with an outstanding portfolio of brands."
A takeover of Foster's had been expected since the group recently demerged operations and amid consolidation within the Australian beverage industry.
"The board believes SABMiller's revised proposal ... reflects compelling value for Foster's shareholders and delivers certain cash proceeds in an uncertain global economic environment and high equity market volatility," Foster's chairman David Crawford said in a separate release.
Foster's, which owns Australia's largest brewer Carlton and United Breweries, recently split its beer division from the underperforming wine assets, which had suffered because of a grape glut and soaring Australian dollar.
SABMiller's pursuit of the Australian company is meanwhile in line with its own strategy of extending its global reach. Founded in South Africa in 1895, SABMiller operates in 75 countries, while it is also a major bottler of Coca-Cola.
SABMiller's share price closed down 1.62 per cent at 2,185 pence in London on Wednesday after a brief rally immediately following the takeover announcement.
The maker of Castle lager has noted that Australia has a strong, wealthy and growing economy that is well positioned to benefit from continued economic growth in Asia, and has a profitable beer market.
Foster's has meanwhile been battling intense competition in the beer industry, affecting its flagship brands VB, Crown and Carlton Draught. Foster's estimated that the domestic beer market shrank seven per cent in the second half of 2010.
But SABMiller, whose products also include Peroni Nastro Azzurro, Tyskie and Blue Moon, said in May that annual net profits for 2010/11 had jumped by a quarter to $US2.4 billion ($A2.3 billion) on rising sales in developing markets.
African, Asian and Latin American sales rose 20 per cent, 16 per cent and seven per cent respectively. SABMiller added that its North America sales were flat, while in Europe they fell three per cent.
The world's biggest brewer is Belgium's Anheuser-Busch InBev - which makes beers including Beck's, Budweiser, Hoegarden, Leffe and Stella Artois.
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