The Australian Competition and Consumer Commission (ACCC) has conditionally approved the proposal by Japanese beer and spirits producer Asahi Group Holdings to acquire Carlton & United Breweries (CUB).

The deal is dependent on Asahi selling two of its beer brands and three cider brands.

Asahi’s cider brands include Strongbow, Bonamy’s and Little Green while the beer brands include Stella Artois and Beck’s.

The buyer of these brands will need to be approved by the ACCC.

A court-enforceable undertaking has been provided by Asahi to the ACCC. In addition, Asahi will ensure these brands will get the same access as its other brands over the next three years.

On the other hand, AB InBev the parent company of CUB has also provided a court-enforceable undertaking to transfer relevant beer brand rights and obligations to the future buyer or buyers.

ACCC chair Rod Sims said: “The ACCC was concerned that without the divestments, the proposed acquisition would substantially lessen competition in the cider market and remove a vigorous and effective competitor in the beer market.

“Without the sale of five beer and cider brands including Strongbow and Stella Artois, the combined Asahi-CUB company would have accounted for two-thirds of cider sales in Australia, and owned the two largest cider brands, Somersby and Strongbow.

“We determined that Asahi selling the beer and cider brands would be sufficient to address our competition concerns and provide an opportunity for another business to play an important role in a relatively concentrated industry.”

The approval comes after ACCC raised competition concerns over the proposed transaction in December last year.