Thai Beverage Plc accepted an Heineken N.V.’s $4.5 billion offer to acquire Fraser & Neave Ltd’s 39.7 percent stake in Asia Pacific Breweries Ltd. Till the day of Thai Beverage Plc’s acceptance, its owner, Charoen Sirivadhanabhakdi was the main opponent of the Heineken N.V.’s offer.
Thai Beverage to Support Heineken’s Offer
Thai Beverage Plc and Tcc Assets Ltd. will support Heineken N.V.’s $4.5 billion offer for Fraser & Neave’s stake in Asia Pacific Breweries Ltd. (APB) at a shareholder meeting which will be held in the last week of September. According to a joint statement, Heineken N.V. has agreed not to make a competing offer for Fraser & Neave, which also owns soda and property units. Charoen Sirivadhanabhakdi’s entities own approximately 30.57 percent of conglomerate Fraser & Neave, Heineken’s joint venture partner in Asia Pacific Breweries Ltd. The support of the Thai billionaire was essential in the Heineken N.V.’s attempt of acquiring Fraser & Neave’s shares in APB.
After the information on the Thai Beverage Plc’s support for Heineken N.V.’s bid, Dutch company’s share grew 5.4 percent on the 19th of September.
In August Heineken N.V. made a $4.5 billion offer to buy Fraser & Neave’s 39.7 stake in Asia Pacific Breweries. But Charoen Sirivadhanabhakdi’s moves made the Heineken N.V.’s offer uncertain. However with the latest support and acceptance of Charoen Sirivadhanabhakdi will be a formality as the board of Fraser & Neave recommended its stakeholders to accept Heineken N.V.’s offer.
Charoen Sirivadhanabhakdi, in return, has been given a declaration that Heineken N.V. would not make an offer for the whole of Fraser & Neave, which owns other businesses, including property as well as soft drinks, that are of interest to Thai Beverage Plc.
Possible outcomes of gaining control of Asia Pacific Breweries
The Thai Beverage Plc’s support for the Heineken N.V.’s offer will bring both companies benefits. Heineken N.V. will get the exposure in Southeast Asia’s beer drinks, while Thai tycoon will earn a lot of money. According to estimates, Charoen Sirivadhanabhakdi will get $1.6 billion, or a 46 percent return on his investments, once the transaction is complete.
Heineken N.V. needs boost to consolidate its position in Asian market, which is one of the fastest growing markets in the world. Analysts hold opinion that by gaining control of Asia Pacific Breweries Heineken N.V. will get this kick to develop and consolidate its businesses in Asia. According to compiled data, gaining the full control of Asia Pacific Breweries would see Heineken N.V having the Tiger and Bintang APB beer brands, which make up approximately 50 percent of the beer market in Indonesia, Malaysia and Singapore as well. After all, Asia Pacific Breweries owns 30 breweries as well as 40 brands spanning 14 Asian countries.
The acquisition of Asia Pacific Breweries would be Heineken N.V.’s largest once since the company purchased Fomento Economico Mexicano S.A.B’s beer maker in 2010. Latest Heineken NV’s acquisitions show the Dutch beer maker seeks its ways to expand business in the fast-growing and emerging markets.