Thai Bev and Charoen’s TCC Assets Ltd. agreed to back Heineken’s S$5.6 billion (US$4.6 billion) bid for Fraser & Neave's 40% stake in the beermaker at a shareholders meeting next week after the Dutch brewer agreed not to make a competing offer for F&N, the Amsterdam brewer said.
Heineken had previously operated APB via a joint venture with F&N.
“For Heineken, this significantly improves the level of certainty that our offer will be approved,” John Clarke, a spokesman for Heineken, said by telephone.
APB would be the Dutch brewer’s largest acquisition since its 2010 purchase of Fomento Economico Mexicano S.A.B’s beermaker as it seeks to expand in faster-growing emerging markets, according to data compiled by Bloomberg. Singapore-based APB has rights to brew Bintang in Indonesia, Anchor in China, Southeast Asia and Sri Lanka, and Heineken from China to New Zealand.
TCC, controlled by 68-year-old Charoen, offered S$9 billion on Sept. 13 to buy the 70 percent of F&N he didn’t control, throwing Heineken’s takeover of APB into doubt. Heineken had originally been spurred to bid for control of APB, which it held 42% of, after a company controlled by Charoen’s son-in- law bought shares in APB.
The agreement “should be very positive for Heineken’s share price,” said Gerard Rijk, an analyst at ING Groep NV (INGA) in Amsterdam. “The company will not need to raise its offer further and it will be able to consolidate the APB business.”
F&N shareholders are scheduled to meet on Sept 28 to vote on Heineken’s offer to buy F&N’s shares in APB. F&N recommended that holders accept Heineken’s increased S$53-per-share bid in August. Heineken, the world’s most acquisitive brewer in the past 12 months, had said it would be its final offer.
F&N also has a food and soft-drinks unit and a real estate division. TCC Assets, linked to Charoen’s Thai Bev, offered S$8.88 a share for F&N. The bid is the largest announced by a Thai company in at least 10 years, according to data compiled by Bloomberg.
Charoen’s agreement to support Heineken’s offer for APB may spur speculation that he would break up F&N, a 129-year-old group. Japan’s Kirin Holdings Co. (2503) owns a 15 percent stake in F&N and had considered making a bid for its food and soft-drinks unit, several people with knowledge of the matter said in August. Coca-Cola Co. (KO) explored a bid for the drinks operations, people with knowledge said.
F&N got 30% of its 2011 revenue of S$6.3 billion from property, 12% from soft drinks and 17% from dairies, according to data compiled by Bloomberg.