Heineken makes $4.1B bid to raise Tiger beer stake

[July 20, 2012]  SINGAPORE (AP) -- Heineken said Friday it is offering $4.1 billion to buy out its partner in the Singapore-based maker of Tiger beer, attempting to neutralize a Thai tycoon's competing bid for influence over the brand as the Dutch brewer expands in emerging markets.

Heineken said it has made a proposal to the board of Fraser & Neave Ltd., which shares ownership of the Tiger beer brewer Asia Pacific Breweries Ltd. with Heineken, to pay 50 Singapore dollars ($40) a share for F&N's nearly 40 percent stake.

The offer is worth S$5.1 billion ($4.1 billion) and would give Heineken about an 82 percent stake in APB. If the offer is accepted, Heineken would spend a further S$2.4 billion to buy out the minority APB shareholders.

The Dutch brewer's move comes after Chang beer and Mekhong rum maker Thai Beverage, controlled by tycoon Charoen Sirivadhanaphakdi, earlier this week said it had entered into agreements with three shareholders to take a 22 percent stake in Fraser & Neave for S$2.8 billion. Separately, a private company owned by the son-in-law of the Thai billionaire bought about an 8 percent stake in APB at S$45 a share.

The Amsterdam-based company said in a statement that increasing its stake in APB, which also brews Heineken beer, is consistent with its strategy of growing in emerging markets. In recent years it has bought brewers in Mexico and Brazil, expanded in India through a partnership with United Breweries and increased its presence in Africa.

"It is time for us to look ahead to the next chapter of our Asian business," said Heineken's CEO Jean-Francois van Boxmeer.

"Both the Heineken and Tiger brand will spearhead our brand portfolio in Asia," he said.

Heineken currently has a 41.9 percent stake in APB through a direct 9.5 percent shareholding and an indirect shareholding of 32.4 percent that is held through a joint venture with Fraser & Neave. The Singapore food and beverage conglomerate, which has been in business with Heineken for the past 80 years, owns 39.7 percent of APB via the joint venture and a 7.3 percent direct stake.

Heineken said its offer is a 45 premium to the average price of APB shares in the past month.

Apart from Tiger and Heineken, APB's well known beers in Asia include Bintang and Anchor.

Singapore trading in shares of APB and Fraser & Neave was suspended Friday following news of Heineken's bid.

[Associated Press]

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