Foster's Group, whose leading lager brands include Corona and Foster's, had in August rejected a hostile bid of Aus$9.51 billion from SABMiller, which produces rival beers Grolsch and Miller Lite.

SABMiller said the Foster's board had since accepted an improved cash offer of Aus$5.10 per Foster's share. SABMiller said it expects the takeover to be completed before the end of 2011 after approval by Foster's shareholders.

"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.

"Foster's has a long-standing and proud reputation as one of the leading companies in Australia. 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," Mackay added.

The prospect of a takeover of Foster's, one of Australia's best known brands, had been anticipated since a recent demerger and amid consolidation within the Australian beverage industry.

"This is a compelling proposal from SABMiller and represents the value inherent in this iconic Australian company and in its brands and people," said Foster's Chairman David Crawford 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 local dollar.

From the September 21, 2011, Prepared Foods' Daily News.