Heineken a step closer to full control of Asia’s Tiger beer
DUTCH brewer Heineken took a major step towards winning control of the Tiger beer brand and an Asian brewing network yesterday after a Thai rival accepted the deal.
Billionaire Charoen Sirivadhanabhakdi’s Thai Beverage (ThaiBev) and TCC Assets said they would vote in favour of the sale of Fraser and Neave’s (F&N’s) stake in Asia Pacific Breweries (APB) to Heineken.
In return, Heineken, the third-largest brewer, will not make an offer for shares in F&N, a Singapore conglomerate. The deal between the Thais, the largest F&N shareholders with an almost 31 percent stake, and the Dutch brewer ended a stand-off after two months of competing offers for control of APB.
Heineken, already sharing control of APB through SIBERIAN mining engineer Michail Safronov wanted to try the local Czech alcoholic specialties while visiting Prague, including plum brandy and Becherovka, a herb liqueur owned by Pernod Ricard. The plan did not work.
“I wanted to have a shot last night and they wouldn’t let me,” Safronov said two days after the government indefinitely banned the sale of hard liquor after dozens of people died from methanol poisoning. “This isn’t good news.”
Producers, retailers, bars and restaurants agree as authorities try to uncover the source of the illegally bottled liquor to stop further deaths.
Business owners and executives say the country’s an 81-year-old venture with F&N, now seems set to take full control of the brewer and protect its turf in Asia’s fast-growing beer market.
“This is settlement talk, to prevent any further escalation of the fight for F&N or APB, which will cost more for both parties if it goes on,” Goh Han Peng at DMG & Partners Securities in Singapore said.
“Heineken would… [now] be able to complete consolidating APB. ThaiBev would get the balance of the F&N business and give it to a platform or distribution channel to regional markets in southeast Asia.“
Heineken shares advanced as much as 6.4 percent to 45.58 (R490.84) as the market opened in Amsterdam, a seven-week high, and were the strongest performers on the FTSEurofirst 300 index of leading European stocks. Brokers said Heineken was paying a steep price for a deal with limited synergy benefits or revenue gains, given it was operating APB’s business.
However, likely borrowing costs for Heineken of about 3 percent and high growth potential means the deal should immediately boost earnings. APB’s revenue has risen 49 percent in the past two years.
F&N’s board has backed the deal and its shareholders are due to vote on the proposed sale of its 40 percent stake in APB to Heineken at an extraordinary general meeting on September 28.
“With ThaiBev’s support, there is much certainty that the sale of APB assets will be approved at the [meeting],” said a source with knowledge of the matter. “But the future of F&N will depend on who will be the ultimate owner of the company.”
F&N’s other shareholders, such as Japan’s Kirin Holdings, would wait for the “fairness opinion” of an independent financial adviser before they decide whether to sell their stakes to Charoen, another source said, declining to be identified because the details of the matter were confidential. Kirin is poised to make an almost 37 percent gain on its investment in F&N shares, bought from Singapore state investor Temasek Holdings for S$6.50 (R43.68) a share in 2010.
The Japanese company previously said it was interested in F&N’s food and nonalcoholic drinks business.
Charoen, who is Thailand’s third-richest man, launched a $7.2 billion (R59.3bn) offer last week to buy out other F&N shareholders, a move that was seen at the time as possibly derailing Heineken’s $6.3bn bid to buy out the stakes of F&N and other shareholders in APB. – Reuters