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Heineken nears APB acquisition

by Renee Cordes  |  Published August 3, 2012 at 10:07 AM
Heineken_227x128.jpgHeineken NV is reportedly close to clinching a deal for control of Singapore-based Asia Pacific Breweries Ltd. after getting the nod from co-owner Fraser and Neave Ltd.

A spokesperson for Heineken was not immediately able to comment on a Reuters report Friday that it had reached an agreement with Fraser and Neave to buy its shareholdings in the maker of Tiger beer.

The news agency reported that Heineken, which already owns 42% of Asia Pacific, had raised its offer "slightly" above 50 Singapore dollars ($40.16) a share for its direct and indirect stakes held by Fraser and Neave.

The original offer, worth a total 5.1 billion Singapore dollars, is due to expire Friday after Heineken extended the deadline by a week at the request of Fraser and Neave, its long-time joint venture partner in Asia.

Fraser and Neave's board, scheduled to meet Friday in Singapore, was expected to endorse the Heineken offer. If the deal goes ahead, it would be the largest acquisition for the Amsterdam-based buyer since its 2010 purchase of the beer operations of Coca-Cola bottler Fomento Economico Mexicano SAB, or Femsa, for $7.4 billion.

Heineken shares added 2.18% by early afternoon on the Euronext Amsterdam exchange to trade at €45.20, for a total market value of €26.1 billion. Shares in Fraser and Neave and Asia Pacific were suspended Thursday and Friday pending an announcement.

Heineken's offer was unveiled two days after Thai Beverage PCL, controlled by billionaire Charoen Sirivadhanabhakdi, struck a S$2.78 billion deal for stakes in Fraser and Neave and APB held by Oversea-Chinese Banking Corp. Ltd., its Great Eastern Holdings Ltd. insurance unit and the closely held Lee Rubber Co. (Pte.) Ltd.

Heineken is also offering S$163 million for Fraser and Neave's interest in the non-APB assets held by Asia Pacific Investment (Pvt.) Ltd., a 50-50 joint venture between Heineken and the beverages-to-property conglomerate.

Heineken's pursuit of Asia Pacific has fueled expectations that Fraser and Neave's non-beer food and drink assets could soon be put in play, with Coca-Cola Co. and Japan's Kirin Holdings Co. (which owns 14.7% of Fraser and Neave) viewed as the most likely suitors.

Fraser and Neave's holdings include a dairy business with 1.1 billion Singapore dollars in 2011 sales as well as a soft drink business, led by 100Plus and F&N Seasons brands, with 759 million Singapore dollars in annual sales. It also has a real state business.

Heineken is taking advice from Credit Suisse Group's David Serre and Citigroup Inc., while Fraser and Neave has enlisted Goldman, Sachs & Co.



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Tags: Asia Pacficic Breweries Ltd. | Fraser and Neave Ltd. | Heineken NV | M&A

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