Trumps Charoen with offer of US$6 billion
Heineken NV, the world's third-biggest brewer, will offer up to US$6 billion to take over Asia Pacific Breweries Ltd (APB), blocking one of Thailand's richest men from building his influence with the maker of Tiger beer.
Heineken, with 42% of APB, will pay as much as S$7.5 billion (189 billion baht) to buy out other shareholders in the Singaporean company including the 40% stake held by Fraser and Neave Ltd (F&N).
Thai Beverage Plc (ThaiBev), controlled by the whisky billionaire Charoen Sirivadhanabhakdi's TCC Group, this week offered to buy a 22% stake in F&N while his son-in-law's company buys 8.4% of APB.
The deal would be Heineken's largest acquisition after offering US$7.4 billion in 2010 for the beer operations of Coca-Cola bottler Fomento Econ?mico Mexicano SAB.
Heineken, which has been involved with APB since 1931, is trying to stop Mr Charoen from seizing control at a time when brewing assets in attractive markets are in short supply, said Goh Han Peng, an analyst at DMG & Partners Securities in Singapore.
''In the past, Heineken was quite comfortable in the partnership with F&N, but the entry of ThaiBev really changed the dynamics of the relationship,'' he said.
''If Heineken had not responded, over time ThaiBev could have increased its stake in F&N and really controlled the interest.''
The S$50 per share offer is a 19% premium to APB's closing price of S$42 on Thursday. That compares with an average premium of 25% paid in 45 takeovers of beer makers announced in the past two years.
The stock was suspended from trade yesterday because of Heineken's new offer announcement.
Thai Asia Pacific Brewery Co (TAPB), the local brewer of Heineken and Tiger beers, says the Dutch move will not affect the Thai operation.
''Even if APB does changes in its shareholding structure, it won't affect us, as APB owns only 36.84% of TAPB,'' said a source in the company.
Thai Life Insurance holds the biggest stake in TAPB at 53.68% and Thai Pure Drinks the remaining 9.48%.
The buy-out bid by Heineken could trigger a takeover battle with ThaiBev.
''I think Mr Charoen's investment in F&N will benefit from F&N's property and food and beverage businesses. It's a tactical move to increase his presence in Asean, and these two areas require strategic partners,'' said the source.
The world's largest brewers are making acquisitions in emerging markets to gain exposure to areas where beer-drinking is rising faster.
Anheuser-Busch InBev NV, the world's biggest brewer, last month agreed to buy the remainder of Mexico's Grupo Modelo SAB for US$20.1 billion in cash, gaining full control of the Corona maker to increase its presence in emerging markets.
APB would fit better with Heineken's assets than in Mr Charoen's ThaiBev empire, said Hugh Young, the Singapore-based managing director of Aberdeen Asset Management Asia Ltd.
''Its Heineken's DNA as a business. Yes, the Thais brew beer as well, but Heineken has really been the founding father,'' he said, adding that the S$50 a share offer is quite high.
Aberdeen said it owns 7% of Oversea-Chinese Banking Corporation (OCBC) as well as less than 1% of F&N and less than 0.1% of APB.
The 22% stake in F&N that ThaiBev has offered to buy belongs to OCBC.
Mr Charoen's holdings of publicly traded assets are worth US$6.1 billion, Bloomberg data show.
''It's Heineken's right to move,'' ThaiBev spokesman Vichate Tantiwanich said on Thursday, adding that the Thai company's purchase of the F&N stake would proceed.
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