MEHL agrees to buy out F&N stake for $560m
Myanma Economic Holdings (MEHL) has finally agreed to settle its dispute with Fraser & Neave for good, by agreeing to buy out F&N's 55-per-cent stake in its profit-making beer enterprise for US$560 million (Bt19.7 billion).
Myanmar Brewery is the maker of the best-selling beer brand, Myanmar Beer, it said in a statement yesterday.
The two parties have agreed to the completion in accordance with the ruling by an arbitral tribunal at the end of last year, and to bring closure to all disputes relating to the payment for the stake.
This agreement also cleared doubts among international investors over the military’s grip on the economy.
Myanma Economic Holdings is one of two major conglomerates owned by the military.
Last year, it sought to buy back the stake, saying F&N defaulted on a term in a joint-venture agreement. F&N, listed in Singapore and owned by two Thai companies controlled by the Siriwadhanabhakdi family, has held the stake for 17 years.
The arbitration body ruled that Myanma Economic Holdings could buy back the stake but disputes continued over the price. Myanma Economic Holdings originally offered only $246 million.
An independent analyst last month valued the stake at $560 million, based on the dollar-kyat exchange rate as of April 30, 2013. Myanma Economic Holdings earlier sought to pay in kyat, which would equate to only $400 million because of the recent depreciation of the kyat to the greenback.
Myanmar Brewery also produces two other brands – Myanmar Double Strong and Andaman Gold. Together, they control 83 per cent of the country’s beer market, according to F&N.
