Heineken bids for APB in response to ThaiBev

Heineken said it had made a proposal to the board of Fraser and Neave Ltd, which shares ownership of Tiger beer maker Asia Pacific Breweries Ltd with Heineken, to pay 50 Singapore dollars (US$40, or Bt1,267) a share for F&N’s nearly 40-per-cent stake.
That offer is worth S$5.1 billion (US$4.1 billion). If it were accepted, Heineken would spend a further S$2.4 billion to buy out the minority shareholders in APB.
The Dutch brewer’s move comes after ThaiBev, controlled by tycoon Charoen Sirivadhanaphakdi, this week said it had entered agreements with three shareholders to take a 22-per-cent stake in F&N for S$2.8 billion. Amsterdam-based Heineken said in a statement that increasing its stake in APB, which also brews Heineken beer, was consistent with its strategy of growing in emerging markets.
In recent years it has bought brewers in Mexico and Brazil, expanded in India through a partnership with United Breweries, and increased its presence in Africa.
“It is time for us to look ahead to the next chapter of our Asian business,” said Heineken chief executive officer Jean-Francois van Boxmeer.
“Both the Heineken and Tiger brands will spearhead our brand portfolio in Asia,” he said.
Heineken currently has a 41.9-per-cent stake in APB through a direct 9.5-per-cent shareholding and an indirect shareholding of 32.4 per cent that is held through a joint venture with Fraser and Neave. The Singapore food and beverage conglomerate, which has been in business with Heineken for the past 80 years, owns 39.7 per cent of APB via the joint venture and a 7.3-per-cent direct stake.
Heineken said its offer was a 45-per-cent premium over the average price of APB shares in the past month.
Prin Malakul, marketing director at Thai Asia Pacific Brewery, said yesterday that the possible deal would not have any impact on the Thai operation as its major shareholders are Thai firms, including Thai Life Insurance and ThaiNamthip.
“APB holds only 36 per cent of Thai Asia Pacific Brewery, while major stakes are still in the hands of Thai shareholders. With this, I don’t think it will be any significant change in the Thai operations,” he said.
F&N and Heineken own about 40 per cent each in Singapore-based Asia Pacific Brewery, and the remaining shares are free-floated in the Singapore stock market.
The purchase of an approximately 20-per-cent stake in F&N by ThaiBev, which would result in 8-per-cent ownership in Asia Pacific Brewery, would not give it major control of the brewery company, compared with the approximately 40-per-cent stake still owned by Heineken.