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Heineken buys F&N after standoff
Source: Agencies |
September 20, 2012, Thursday
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Print Edition
Print Edition
HEINEKEN NV took a major step toward winning control of the Tiger beer brand and an Asian brewing network yesterday after a Thai rival accepted the deal.
Thai Beverage PCL and TCC Assets Ltd said they would vote in favor of the sale of Singapore conglomerate's Fraser and Neave's stake in Asia Pacific Breweries Ltd to Heineken.
In return, the Dutch brewer, the world's third-largest brewer, will not make an offer for shares in F&N.
The deal between the Thais, the largest F&N shareholders with a near 31 percent stake, and the Dutch brewer ended a standoff after two months of competing offers for control of APB.
Heineken, already sharing control of APB through an 81-year-old venture with F&N, now seems set to take full control of the brewer and protect its turf in Asia's fast-growing beer market.
"This is settlement talk, to prevent any further escalation of the fight for F&N or APB, which will cost more for both parties if it goes on," said Goh Han Peng, an analyst at DMG & Partners Securities in Singapore.
"Heineken would henceforth be able to complete consolidating APB. ThaiBev would get the balance of the F&N business and give it to a platform or distribution channel to regional markets in Southeast Asia."
Brokers said Heineken is paying a steep price for a deal with limited synergy benefits or revenue gains, given it is already operating APB's business.
But likely borrowing costs for Heineken of only 3 percent and high growth potential means the deal should immediately boost earnings.
Thai Beverage PCL and TCC Assets Ltd said they would vote in favor of the sale of Singapore conglomerate's Fraser and Neave's stake in Asia Pacific Breweries Ltd to Heineken.
In return, the Dutch brewer, the world's third-largest brewer, will not make an offer for shares in F&N.
The deal between the Thais, the largest F&N shareholders with a near 31 percent stake, and the Dutch brewer ended a standoff after two months of competing offers for control of APB.
Heineken, already sharing control of APB through an 81-year-old venture with F&N, now seems set to take full control of the brewer and protect its turf in Asia's fast-growing beer market.
"This is settlement talk, to prevent any further escalation of the fight for F&N or APB, which will cost more for both parties if it goes on," said Goh Han Peng, an analyst at DMG & Partners Securities in Singapore.
"Heineken would henceforth be able to complete consolidating APB. ThaiBev would get the balance of the F&N business and give it to a platform or distribution channel to regional markets in Southeast Asia."
Brokers said Heineken is paying a steep price for a deal with limited synergy benefits or revenue gains, given it is already operating APB's business.
But likely borrowing costs for Heineken of only 3 percent and high growth potential means the deal should immediately boost earnings.
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