AUS: Lion Nathan Coopers fight takes another twist

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Lion Nathan has received competition clearance for its proposed takeover of Coopers Brewery. The Australian Competition and Consumer Commission (ACCC) said today (5 December) that it would not oppose the acquisition, leaving the final decision in the hands of Coopers' shareholders, whose EGM to vote on takeover-related issues has been sensationally postponed again.

"While the ACCC recognised that Coopers' market share is growing, including outside of South Australia, its market share remains small, and substantially smaller than the two major beer producers in Australia, CUB and Lion Nathan", ACCC chairman Graeme Samuel said.

Last month, the ACCC requested further information on the extent to which Coopers influences the pricing, product development and marketing of, in particular, Carlton United Breweries (CUB) and Lion Nathan, and whether the removal of the Coopers distribution network would raise barriers to entry.

"The evidence received … suggested that most competitive tension in the beer market is generated by competition between Lion Nathan and CUB", Samuel said.

"The evidence also suggested that the removal of Coopers as an independent beer wholesaler also would be unlikely to raise substantial competition concerns. While Coopers provides sales and marketing services, it relies on the existing independent wholesale distribution network to physically distribute beer products. This network will remain in place following the acquisition. In the national beer market, Coopers only distributes a small percentage.

"Accordingly, the ACCC considered that Lion Nathan's proposed acquisition of Coopers is unlikely to result in a substantial lessening of competition."

Coopers shareholders were scheduled to vote on removing Lion Nathan's pre-emptive share purchase rights on Wednesday (7 December). But the Australian Takeovers Panel has again postponed the meeting until next week, giving Lion Nathan until the end of this week to detail issues it has over the Coopers board's handling of its bid. Lion Nathan has been fighting to postpone the meeting, as if Coopers' shareholders vote in favour of the removal of Lion's rights, then the A$420m bid will be effectively dead.

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