OFT rubber-stamps Foster's wine deal

The Office of Fair Trading has given the thumbs-up to Foster's takeover of wine maker Southcorp.

The UK regulator ruled that the proposed merger by the two Australian drinks giants does not raise any serious competition issues in the UK.

Although Southcorp's Rosemount Estate brand is one of the top ten UK wine brands sold in the UK, neither company has a significant share of the fragmented UK wine market.

The OFT said pub chains, supermarkets and off licences "have a considerable degree of countervailing buyer power". It added that "the parties' combined share of supply does not give rise to competition concerns."

Foster's launched its A$3.1bn (around $1.2bn) takeover offer for Southcorp in January. Tne brewer has built up a stake of more than 19 per cent and is offering other shareholders A$4.14 (£1.70)in cash.

The offer has been extended twice, most recently until April 28, with many shareholders thought to be holding out for an increased offer or a rival bid.

However, Foster's has insisted the offer on the table is an "outstanding price". As it extended the offer, a company spokeswoman said Foster's will be "patient and disciplined", adding "we have noticed that the Southcorp share price is starting to reflect some of the market's sentiment that there are no other bidders around."

Foster's wine subsidiary, Beringer Blass, markets brands such as Wolf Blass and Yellow Glen. Along with Rosemount Estate, Southcorp's main brands are Penfolds, Lindemans and Wynns Coonawarra Estate. In the last financial year Southcorp's UK turnover was around £81m.