SINGAPORE--Shareholders of Fraser & Neave Ltd. (F99.SG)
Friday agreed to sell their stake in a beer joint venture to
Heineken N.V. (HINKY, HEIA.AE) for about $4.6 billion, ending a
two-month saga in which the Dutch brewer's bid to strengthen its
foothold in the lucrative Asian beer market looked to be threatened
by a reclusive Thai billionaire.
The decision, passed at a meeting of F&N shareholders, paves
the way for Heineken to take full control of Asia Pacific Breweries
Ltd. (A46.SG), the maker of Tiger Beer and one of Asia's most
profitable beer businesses. As of Friday, F&N owns 39.7% of
APB, while the Dutch brewer owns 55.64%.
The deal would give Heineken control over the Tiger and Bintang
APB beer brands, which make up nearly 50% of the beer market in
Indonesia, Malaysia and Singapore, according to data provider
Euromonitor.
The race to gain control of APB started in mid-July when Mr.
Charoen Sirivadhanabhakdi began buying stakes in F&N as well as
APB, respectively through his beer outfit Thai Beverage PCL
(Y92.SG) and Kindest Place Groups, a vehicle linked to his
son-in-law.
The Thai tycoon's purchase of stakes in F&N and APB prompted
Heineken to try to wrest control of its 81-year-old joint venture
with the Singapore conglomerate. The Dutch firm in July made a 5.1
billion Singapore dollar ($4.2 billion) offer for the whole of APB,
sweetening that bid to S$5.6 billion a month later.
But as Heineken awaited the outcome of the F&N shareholder
meeting, Mr. Charoen's entities continued to complicate matters and
built up stakes in F&N, which also owns property and soft
drinks businesses. Mr. Charoen on Sept. 13 made a $7.2 billion
offer to take full control of F&N, prompting market speculation
of a brewing battle between the Thai tycoon and Heineken for
control of APB.
However, on Sept. 19, Mr. Charoen put the speculation to rest
after his companies said they would support Heineken's bid for
APB.
Though Fraser & Neave's beer assets were his first focus,
people who know Mr. Charoen say he now has his eye on the Singapore
company's property portfolio and a regional distribution network
driven by its soft-drinks business. Together, analysts said, those
assets can help Mr. Charoen create a business that doesn't rely on
shipping a huge volume of rice-liquor back home to rural
Thailand.
F&N's property assets include residential, office, retail
and hospitality properties spanning Asia, while its soft drinks
business sells beverages like the popular 100 Plus sports drink.
Mr. Charoen's TCC Group includes property developer TCC Land,
although his business interests are mainly focused on Thailand.
F&N has appointed Goldman Sachs and JP Morgan as its
advisers on Mr. Charoen's takeover offer.
At Friday's meeting, some 98.73% of F&N shareholders voted
in favor of Heineken's offer, with just 1.27% rejecting the deal.
Singapore regulators will also have to sign off on Heineken's bid
before the Dutch brewer gets full control of the Singapore-listed
firm's 30 breweries and 40 brands spanning 14 Asian countries.
Analysts said that Heineken's offer comes at a high price,
valuing APB at a price-to-earnings ratio of 35.1. This is well
above the 20.3 for Carlsberg Brewery Malaysia Bhd. (2836.KU), and
16.6 times for Japan's Sapporo Holdings Ltd. (2501.TO).
Write to P.R. Venkat at venkat.pr@dowjones.com
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