Heineken nears Tiger beer deal after ThaiBev acceptance


  • Business
  • Wednesday, 19 Sep 2012

BRUSSELS: Dutch brewer Heineken took a major step towards taking control of Asia's Tiger beer by securing acceptance from a Thai billionaire who had been viewed for weeks as a spoiling rival.

Charoen Sirivadhanabhakdi's ThaiBev and TCC Assets Ltd agreed to support the sale of Singapore conglomerate Fraser and Neave's stake in Tiger beer maker Asia Pacific Breweries Ltd to Heineken NV.

In return, the world's third-largest brewer will not make a general offer for shares in F&N, according to the joint statement by the Thai companies and Heineken released late Tuesday European time and in the early hours of Wednesday in Asia.

Charoen, whose companies own just below 31 percent of F&N, launched a $7.2 billion offer last week to acquire the rest, a move seen at the time as possibly derailing Heineken's $6.3 billion bid to buy out the holdings of F&N and others in APB.

After two months of steadily higher offers for F&N and APB, bound together by a complex ownership structure, the Thais and the Dutch brewer ended their standoff.

Now Heineken, the world's third largest brewer, appears on course to succeed in taking full control of APB. F&N's board has already backed the deal and F&N shareholders will vote on Sept 28.

PRECURSOR OF F&N BREAK-UP?

Heineken described the deal as a good next step, although it will also need other shareholders to vote in favor.

"It significantly improves our level of certainty that our offer will be accepted," said Heineken spokesman John-Paul Schuirink.

Shareholders may be persuaded to back the Heineken deal by the proposal of F&N's board to use the proceeds to pay out S$4 billion ($3.27 billion) through a capital reduction.

APB shares closed on Tuesday at S$53.09.

In turn, the path is clear for Charoen, Thailand's third-richest man, to profit from the Heineken payout and expand in Asian property and soft drinks - the main businesses left in F&N after the sale of its beer interests.

However, industry watchers say the Thais may need to pay more than their current offer of S$8.88 per share if they are serious about gaining control of F&N. Its shares closed on Tuesday at S$8.97.

The divestment of its brewing assets and the offer from the Thais could force a full break-up of Fraser and Neave.

The Thais recently bought out Pepsi's bottling business in Thailand and Charoen already has substantial property investments in Singapore.

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