Heineken to buy F&N's interests in Asia Pacific Breweries
Amsterdam-based Heineken NV today launched a bid to take over Fraser and Neave Ltd (F&N)'s direct and indirect interests in Asia Pacific Breweries Ltd (APB).Heineken now holds 42 per cent in APB, which has offered 40 beer brands throughout Asia Pacific. Heineken announced the decision following Thai Beverage Plc’s bid to take over a 22 per cent stake in F&N, which is another major shareholder of APB through direct and indirect interests.
In its statement, Heineken said it offered $50 per each of APB shares, or a total of 5.1 billion Singapore dollar. In addition, Heineken has offered S$163 million for F&N's interest in the non-APB assets held by Asia Pacific Investment Private Ltd (APIPL), a 50-50 joint venture between Heineken and F&N. APIPL now owns 64.8 per cent stake in APB. F&N also holds a direct stake of 7.3 per cent in APB while Heineken directly holds 9.5 per cent stake in the beer company. Of all brands sold by APB, Heineken accounts for 30 per cent of the volume. The offer came as ThaiBev, Thailand’s largest beer maker, will acquire a 22 per cent stake of F&N while Kindest Place Groups will acquire a 8.4 per cent in APB from OCBC Bank, Great Eastern Holdings and Lee Rubber.
Heineken also promised to make a mandatory general offer for all the shares of APB, not already owned by Heineken, at the same pirce. That will cost it S$2.4 billion.
In the statement, Heineken said that it believes that its offer represents compelling value for F&N shareholders and APB's minority shareholders and treats all APB shareholders equally. The offer price represents a premium of 45 per cent over the one-month volume weighted average price per APB share. When the deal was completed, it is also confident that the offer will also generate long-term financial and strategic value for its shareholders, given the attractive growth potential of South-East Asia and the company's strong position within the international premium beer segment.
"We really value our partnership with F&N which goes back over 80 years, but due to changes in the F&N and APB shareholding, the fabric of the partnership has changed. As a result, it is time for us to look ahead to the next chapter of our Asian business, in which Singapore will continue to be our regional headquarters and both the Heineken® and Tiger brand will spearhead our brand portfolio in Asia," said Heineken Chairman and Chief Executive Officer Jean-François van Boxmeer.
"We believe that our offer for the APB shares is highly attractive and provides excellent value to F&N and APB shareholders. At the same time, taking control of APB will create long-term financial and strategic value for Heineken's shareholders."
Heineken supported the move by saying that it is in line with the company's strategy to expand its presence in emerging markets and follows transformational deals in recent years that have included the acquisition of the brewing operations of FEMSA in Mexico and Brazil, the partnership with United Breweries in India and acquisitions and capacity investments in Africa. If agreed, the offer will strengthen Heineken's platform for growth in some of the world's most exciting and dynamic economies with fast-growing populations. Heineken will have direct access to a number of important markets, including Cambodia, China, Indonesia, Malaysia, New Zealand, Papua New Guinea, Singapore, Thailand and Vietnam.
When completed, the offer will also strengthen Heineken's portfolio, providing control of the strong international Tiger brand and strong regional and local brands such as Anchor, Bintang and Larue. In addition, Heineken will be able to consolidate APB in its accounts, providing better visibility to its Asian operations.