Fierce fights against global giants

At a time when Thailand is heavily promoting overseas investment to counter “hot money” flowing into the country, Charoen, 68, has helped raise the profile of Thai businesspeople and encouraged his peers to follow the path he has laid out, without fear.
Even though his takeover attempt for Singapore-listed Fraser and Neave has not yet been resolved, his shrewd strategy for the acquisition of F&N and Asia Pacific Breweries (APB) is dazzling enough to make him our “Businessman of the Year”.
He easily rose above the other candidates for this year’s honours, including Dhanin Chearavanont, chairman of Charoen Pokphand Group, who made a surprise entry to China’s insurance industry through the US$9.4-billion (Bt287-billion) takeover of a stake in Ping An Insurance.
The other candidate was Tos Chirathivat, chief executive officer of Central Retail Corp. After the acquisition of Italy’s 11-store La Rinascente chain in 2011, CRC this year continued with overseas investment with expansion of its business in China and penetration into Indonesia.
Executives of Honda Automobile (Thailand) also deserve accolades for the company’s fast and strong recovery after last year’s flood. Resuming production in April, its sales in the seven-month period after that exceeded those of Isuzu, Thailand’s leader in the pickup segment.
In 2012, Charoen made a firm move to expand his business overseas further, |particularly in the non-alcoholic-beverage segment.
Charoen was born and raised in Bangkok’s Chinatown district after his parents moved from Shantou in China, according to TCC’s website. He started a trading business that supplied distilleries, and became a distiller after being awarded concessions to produce liquor in Thailand.
Charoen bid for the rights to operate distilleries under the Sang Som Group during the liberalisation of the nation’s liquor industry, and later expanded into beer, alcohol, sugar, and packaging businesses.
With property in various countries including New Zealand, the United States and Japan, as well as agricultural projects in Laos and manufacturing in Vietnam, at home Charoen felt pressure in the alcoholic business. Acquisition of Oishi to expand his non-alcoholic-beverage portfolio did not change the business scene much. Charoen felt the strong need to grow the high-margin business regionally.
And the fastest way to do that was through acquisitions.
The tycoon, ranked by Forbes as Thailand’s third-richest person with net worth of $6.2 billion, made a decisive move to take over APB. Through his Thai Beverage unit, he launched a surprise takeover offer, knowing he would have to fight directly with Heineken, the world’s third-largest brewer.

TRIUMPH OVER PEPSICO
Giving him the confidence might have been the 2011 acquisition for Serm Suk, the Thai bottler of PepsiCo. In a fight against PepsiCo, the world’s second-largest food and beverage business, he won a year-long fight. Thai Beverage Logistics, one of more than 100 companies in his empire, won Serm Suk’s distribution network, which covered 160,000 grocery stores, 1,200 sales trucks and 150,000 coolers nationwide.
PepsiCo paid dearly for the loss, failing to win support from Serm Suk’s founder and shareholders.
Charoen adopted a similar strategy when he launched the offer for APB. It was when the bid was announced in August that shareholders of F&N, which formed APB with Heineken decades ago, realised the high value of the local brewer. They took notice, and that forced Heineken to join the bidding. Heineken had to revise the bid once to win.
Though backing off, Charoen netted about 1 billion Singapore dollars (Bt25 billion) from the deal, which increased his ammunition for the next target – F&N.
“Charoen’s style isn’t to rush in to buy a stake to scare shareholders,” ThaiBev CEO Thapana Sirivadhanabhakdi said of his father at a media briefing in Bangkok on September 9. “The company has studied F&N’s business for many years.”
Through F&N, a food/beverage and property conglomerate with presence in more than 20 countries covering the Asia-Pacific region, the US and Europe, he would quickly fulfil his vision in growing his empire regionally and globally.
As this article goes to press, the deal is still not over. Overseas Union Enterprise, a unit of Hong Kong-listed Lippo Group, has entered the fighting ring. OUE seems to have an advantage, with the higher bid.
Bloomberg reported recently that TC Assets, the vehicle used to take over F&N, sought to raise the stake in F&N by 10 per cent through funds.
On Monday, Charoen’s financial advisers for the deal - United Overseas Bank, DBS Bank and Morgan Stanley Asia (Singapore) – announced that TC Assets from time to time had been approached by shareholders and/or brokers in relation to potential sales of shares in F&N.
The deal has not yet been finalised as TC Assets’ offer period has been extended to January 2 or later, but Charoen has successfully made a series of major headlines across the region. The son of a Bangkok street vendor who made his fortune selling beer and whiskey, he has made a name for himself and raised the Kingdom’s profile.
His relentlessness should encourage many to follow suit. This should be a boon to the country, which is flooded by capital inflows as a result of quantitative easing in many developed economies.
According to the Bank of Thailand, 2011 was the first time the country’s overseas investment was almost balanced by inflows – which helped stabilise the foreign-exchange rate and sustain export growth. The trend should continue into the new year, as Charoen should not be the only Thai businessman who does not fear to tread overseas.