As Dutch brewer's takeover offer for APB gets nod, Thai firm says it is privileged to be stakeholder in F&N
Fraser and Neave (F&N) and Heineken have agreed on a US$4-billion (Bt126.4 billion) takeover deal for F&N unit Asia Pacific Breweries (APB), while F&N stakeholder Thai Beverage said it was ready to work with the global brewer.
Bloomberg quoted three people with knowledge of the matter as saying that F&N’s board of directors would recommend its shareholders sell APB shares to Heineken at 50 Singapore dollars (Bt1,268) apiece. Acquiring F&N’s 40-per-cent stake in APB will give the Dutch brewer control of the Singapore-based maker of Tiger beer. Heineken already owns 42 per cent and said July 20 it would offer as much as S$7.5 billion for the rest.
Heineken, which accounts for about 8.8 per cent of the global beer market, has the smallest emerging-markets presence of the world’s big three brewers, according to data compiled by Bloomberg. About 37 per cent of operating income came from Western Europe last year.
The Dutch brewer, which has been involved with APB since 1931, made the offer to protect its position in a key emerging-market asset after ThaiBev, controlled by billionaire Charoen Sirivadhanabhakdi, last month bid for a 22-per-cent stake in F&N, while a company owned by his son-in-law acquired about 8.4 per cent of APB.
The deal would be Amsterdam-based Heineken’s largest after offering US$7.4 billion in 2010 for the beer operations of Coca-Cola bottler Fomento Economico Mexicano SAB, or Femsa.
Besides the Singaporean Tiger brand, APB has rights to brew Bintang beer in Indonesia, Anchor in China, Southeast Asia and Sri Lanka, and Heineken from China to New Zealand.
In its statement on July 27, Heineken said that it is keen to agree a consensual deal with F&N. “However, if Heineken is denied the ability to extend its offer to all APB shareholders it will review all options available to protect its commercial interests.”
A source at Thai Beverage, however, said the company had no plan to sell its stake in F&N, and is ready to work together with Heineken in the Singapore-based brewery. Its acquisition of Serm Suk, a local logistics firm and bottler of Pepsi-Cola in Thailand, is a clear example of ThaiBev’s ability to extend the distribution of its beverages, both alcoholic and non-alcoholic, to more specific outlets such as food stalls, the source said.
Thapana Sirivadhanabhakdi, president and chief executive officer of ThaiBev, said earlier in a company statement that to become a shareholder of F&N is a great opportunity as it would contribute to the synergy of both parties, while giving ThaiBev exposure to the knowledge and experiences of F&N’s management team, which has keen expertise in Asean.
Heineken’s offer period ended yesterday. Its offer sparked buying sprees for APB shares, whose price peaked last week at S$52, on expectation that other brewers would be drawn into the takeover fight. Kirin Holdings, Japan’s second-largest brewer, was reportedly interested in joining the bid. Coca-Cola was also reportedly interested in the non-alcohol business of F&N.
Aside from APB, F&N also owns a real estate business with shopping centres, serviced apartments and industrial property. Real estate accounted for 34 per cent of 2011 sales. It also generated a sizeable amount from dairy business and soft drinks.