Burns Philp gets nod for UK deal
SYDNEY, Australia (CNN) -- Australian food and ingredients maker Burns Philp has won approval from the competition watchdog to sell its yeast and bakery division to UK-based Associated British Foods.
The Australian Competition and Consumer Commission (ACCC) said Wednesday it would not oppose the deal, announced by Burns Philp two months ago.
ACCC chairman Graeme Samuel said the acquisition was "unlikely to substantially lessen competition in the relevant markets."
Burns Philp said in July it planned to sell its industrial yeast and U.S.-based Tones Brothers spices and herbs business to Associated British Foods for Aust. $1.9 billion ($1.35 billion).
At the time, Burns Philp said the sale would allow it to cut debt by A$475 million, with the remainder going to cash reserves.
Burns Philip's debt level rose to an estimated A$2.6 billion after the takeover of another Australian food company, Goodman Fielder, which it bought in 2003 for A$2 billion (about $1.4 billion).
Last month, Burns Philip announced its 2003-04 net profit fell by more than a third to A$110.9 million, in part due to restructuring costs from the Goodman Fielder acquisition.
Before the British Foods deal, Burns Philp had been the world's second-largest maker of industrial yeast, behind the Lesaffre Group of France.
Burns Philip is held 57 percent by New Zealand entrepreneur Graeme Hart, who took over the company in 1997.
Its shares closed unchanged Wednesday at A$0.71.