HEINEKEN’S drawn-out acquisition of the maker of Tiger Beer cleared a major hurdle towards completion yesterday, as the Dutch beer firm announced a truce with its major rival for the deal.
ThaiBev said it would vote in favour of Heineken’s purchase of the 40 per cent of Asia Pacific Breweries (APB) owned by drinks firm Fraser & Neave (F&N) when F&N shareholders decide on the deal next week.
The Thai company, owned by billionaire Charoen Sirivadhanabhakdi, owns a 31 per cent stake in F&N, and had made plans to secure billions in loans to support a takeover of the rest of F&N and block Heineken’s bid.
However, ThaiBev yesterday said it would approve the deal in exchange for Heineken promising not to bid for F&N shares, poach ThaiBev executives or to sell soft drinks in certain Asian countries.
Shares in Heineken rose 6.35 per cent yesterday, their biggest single jump in three years, as it cleared the most significant remaining barrier to the purchase of APB. “Although we cannot rule out any further stumbling blocks, this increasingly looks a done deal for Heineken. A further sweetener for the deal could be distribution rights for Heineken – or even full control – of Thai Bev’s Chang beer brand in Thailand,” Espirito Santo’s Martin Dolan said.
Heineken, which has seen its core European beer market suffer in difficult economic conditions, sees the APB deal as crucial to its plan to expand in fast-growing new markets.
APB – which has seen its revenue rise 50 per cent in the last two years – owns the Tiger Beer brand, as well as other beers popular in Asia.
The Dutch firm was forced to raise its offer for F&N’s stake in APB from 5.3bn Singaporean dollars (£2.7bn) to S$5.6bn a month ago as a rival bid from ThaiBev loomed, valuing APB at £6.8bn.
Heineken, the world’s third-largest brewer, also agreed to purchase an 8.6 per cent stake in APB owned by Charoen’s son in law, meaning that as long as F&N’s sale goes through, it will have a 95 per cent stake in APB and will be able to launch a takeover bid for the rest of the firm.
F&N shareholders, who have been advised by the board to approve Heineken’s bid, will vote next Friday.