Thursday, 19 July 2012

Heineken Plans S$7.7 Billion APB Bid In Asian Beer Push

Heineken NV (HEIA), the world’s third- biggest brewer, offered S$5.1 billion ($4.1 billion) to buy the rest of Asia Pacific Breweries it doesn’t own from Fraser & Neave Ltd. to extend control of the Tiger beer brand amid a push into emerging markets.

Heineken will pay S$50 per share for Fraser & Neave’s interests in Asia Pacific Breweries Ltd. (APB), or APB, and S$163 million for its share in Asia Pacific Investment Pte, the Amsterdam-based company said in a regulatory statement. Heineken owns a 42 percent stake in Asia Pacific Breweries. Fraser & Neave owns 40 percent.

“The primary motivation is to secure some control of the company,” said Goh Han Peng, an analyst at DMG & Partners Securities. “The offer is quite compelling and for any other player to come in and make counter offer, they first have to contend with the fact that Heineken won’t be a seller of the stake they own.”

The purchase comes after Thai Beverage Pcl (THBEV) and a family member of the company’s founder offered to buy shares of Fraser & Neave and Asia Pacific Breweries this week from a group of investors. Goh yesterday said Fraser & Neave’s stake in Asia Pacific Breweries is its “crown jewel” because of its presence in more than a dozen regional markets.
Brewing Assets

Brewing assets in attractive markets are in short supply globally as beer makers buy each other to boost sales. Anheuser- Busch InBev NV, the world’s biggest brewer, in June agreed to buy the remainder of Mexico’s Grupo Modelo SAB for $20.1 billion in cash, gaining full control of the Corona maker to increase its presence in emerging markets.

Heineken is trying to extend its reach in emerging markets, with acquisitions of investments in Mexico, India, Brazil, and Africa in recent years, the company said in a statement. The price offered is a 19 percent premium to Asia Pacific Breweries’ closing price of S$42 yesterday.

Thai Beverage, Thailand’s biggest beer maker, this week agreed to pay S$2.78 billion ($2.2 billion) for Fraser & Neave’s shares held by Oversea-Chinese Banking Corp. and its partners.

Thai Beverage is controlled by Thai billionaire Charoen Sirivadhanabhakdi’s TCC Group. Charoen also owns companies in industries ranging from insurance to property development. His son-in-law, Chotiphat Bijananda, will buy stakes in Asia Pacific Breweries, Thai Beverage said.

OCBC, Singapore’s second-biggest bank, said it will sell S$389.3 million of Asia Pacific Breweries shares Bijananda’s company, while Great Eastern will divest its stake in the Singapore beermaker for S$530.9 million. The price for both stakes was S$45 a share.

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