Money Matters - Simplified

Heineken clinches S$5.6bn deal for Asia Pacific Breweries

Brands like the iconic Tiger Beer is sold in 60 countries and others like Anchor, Bintang and Larue are very popular in Southeast Asia.

In a move to trump rival takeover attempts and gain control of one of Asia's most profitable beer markets, Heineken, the world's third-largest brewer raised its bid to buy Singapore's Fraser & Neave Ltd's entire stake in Tiger beer maker Asia Pacific Breweries (APB).

The Dutch brewer will now pay S$5.6 bn ($53) a share for entire Fraser & Neave's stake in APB.

F&N and Heineken share a 50-50 joint venture that owns 64.8 percent of Asia Pacific Breweries.

The former has a 7.3 percent direct stake in APB while Heineken has 9.5 percent direct shareholding.

Heineken had launched S$5.1bn bid in July for a majority stake in APB. However, the deal ran into trouble after Thai Beverage and Kindest Place Group, companies linked to Thai tycoon Sirivadhanabhakdi's family, offered to pay S$55 a share for the 7.3 percent stake owned by Fraser & Neave.

Heineken clinches deal
Heineken’s final offer of $53 a share, or S$5.6bn, has been accepted by the F&N board. As a part of the agreement Fraser & Neave cannot hold talks with alternative bidders for its Asia Pacific stake.

Heineken said in a statement, "Heineken today announced it has agreed a final offer of Sg$53 per APB share for Fraser and Neave's entire stake in APB.

"The total cash consideration to F&N under the final offer will be Sg$5.6 billion, an increase of Sg$307 million compared to Heineken's previous offer made on 20 July, 2012.

"Heineken will not increase its final offer and believes that it provides compelling value to both F&N and APB shareholders.”

Full control of APB will help Heineken strengthen its foothold for growth in some of the world's fast-growing economies including Cambodia, China, Indonesia, Malaysia, New Zealand, Papua New Guinea, Singapore, Thailand and Vietnam.

Full control
Falling beer consumption in Western Europe and the US, has forced the brewing giants to focus their attention to emerging markets for profit undertakings.

On the successful closing of the deal, the Amsterdam-based brewer with 81.6 percent holding will make a general mandatory offer to buy out the minority shareholders in APB in accordance with Singapore takeover rules.

If the offer is accepted by the remaining APB shareholders, the 18.4 percent stake will cost Heineken S$2.5bn.

Full control of APB will help Heineken strengthen its foothold for growth in some of the world's fast-growing economies including Cambodia, China, Indonesia, Malaysia, New Zealand, Papua New Guinea, Singapore, Thailand and Vietnam.

Brands like the iconic Tiger Beer is sold in 60 countries and others like Anchor, Bintang and Larue are very popular in Southeast Asia.

Heineken chief executive, Jean-François van Boxmeer, said, "I am pleased that F&N’s Board has agreed that our increased offer, which is now final, represents excellent value for F&N and APB shareholders.

"Our Asian headquarters will continue to be based in Singapore, and we remain 100pc committed to the growth and success of APB and the Tiger brand, just as we have been for the last 81 years.”