Heineken makes $4.1 bn bid for Singapore brewer

Dutch beer group Heineken on Friday announced a Sg$5.1 billion ($4.1 billion) bid for Singapore's Asia Pacific Breweries (APB) to boost its presence in the region's booming alcohol market.

Heineken said it had offered to pay Sg$50 a share for APB parent Fraser & Neave's (F&N) entire stake in the brewer, a premium of Sg$8 over its Thursday closing price.

Analysts said the move could trigger a takeover battle with Thai and Japanese investors for control of APB, which makes Tiger beer and other brands that are popular across Asia, including the Chinese market.

F&N said in a statement it was considering the Heineken offer "which remains open for acceptance" until July 27.

"There is no certainty that any transaction or agreement will be entered into as at the time of this announcement," it added.

Trading of shares in APB and F&N was halted at the Singapore Exchange on Friday after Heineken made its bid public.

Heineken and F&N have been longtime partners in Asia.

Heineken currently owns 41.9 percent of APB, one of Southeast Asia's biggest brewers, while F&N holds 40 percent.

Japanese brewer Kirin Holdings owns 14.7 percent of F&N.

"Heineken's offer is in line with the company's strategy to expand its presence in emerging markets," the Dutch brewer it said in a statement issued from Amsterdam.

Heineken said a takeover would give it direct access to a number of important markets including Cambodia, China, Indonesia, Malaysia, New Zealand, Papua New Guinea, Singapore, Thailand and Vietnam.

Heineken's bid came after Kindest Place, a company owned by a son-in-law of Thai drinks tycoon Charoen Sirivadhanabhakdi, offered to buy an 8.6 percent stake in APB for Sg$45 a share, Dow Jones Newswires said.

Charoen's own firm, Thai Beverage Ltd, which makes Chang beer, has also offered to buy a combined 22 percent stake in F&N for Sg$2.78 billion from Singapore's OCBC Bank and partners.

"We suspect the Heineken move is in response to the Thai offer," said a Singapore-based analyst who asked not to be named because of his company's association with one of the parties.

"It's all about the Asian growth story. The beer business is very lucrative in the region."

Justin Harper, market strategist with IG Markets Singapore, said he expects a "three-way battle" involving Heineken, the Thai tycoon and Kirin Holdings.

"Kirin will be watching developments very closely as APB is a prized asset in the sweet spot for the growth of beer consumption in Asia," Harper told AFP.

"While Kirin has so far denied any fresh bid, one can't rule this out once the dust settles on the surprise counter bid from Heineken," he said.

Heineken has seen demand slow in more mature markets like Western Europe and already earns about half of its profits from emerging markets, he said.

Dow Jones Newswires quoted a Kirin spokesman as saying: "We don't know how things will play out from here, but we're anticipating various scenarios and closely watching the situation."

Thai Beverage senior vice president Vichate Tantiwanich said Heineken's offer for APB does not affect its investment in F&N, according to Dow Jones.

Heineken said it was "keen to agree a deal with F&N" but gave notice that if Heineken is "denied the ability to extend its offer to all APB shareholders it will review all options available to protect its commercial interests".

"We really value our partnership with F&N which goes back over 80 years but, due to changes in the F&N and APB shareholding, the fabric of the partnership has changed," Heineken chairman and chief executive Jean-Francois van Boxmeer said in the statement.

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