Dutch brewer Heineken said Friday it has reached a deal to buy the Asian brewing group that makes Tiger beer for $4.1 billion, as it seeks to bolster its presence in the fast-growing region.
Heineken said Singapore-listed Fraser & Neave (F&N) has accepted its offer to acquire its stake in Asia Pacific Breweries (APB), adding that the F&N board has agreed to recommend the Sg$5.1 billion deal to shareholders.
Heineken had earlier said that a takeover of APB would give it direct access to key Asian markets including Thailand, Singapore and New Zealand.
Heineken currently owns 41.9 percent of APB, one of Southeast Asia's biggest brewers, and taking F&N's 40 percent will give the Amsterdam company a distinctive edge over Thai Beverage Ltd.
The Thai company, owned by tycoon Charoen Sirivadhanabhakdi, owns 8.5 percent in APB.
In a statement released in Amsterdam, Heineken said it had offered to buy all of F&N's shares in APB for Sg$50 apiece, a premium of 45 percent over the one-month volume weighted average price per share, for a total of Sg$5.1 billion.
"The board of F&N has agreed to recommend to the shareholders of F&N to vote in favour of the proposed transaction at the relevant shareholders' meeting," the statement said.
"The agreement is subject to successful negotiation and execution of definitive transaction documents between Heineken and F&N."
If the deal goes through, Heineken will have to make a mandatory offer for the outstanding shares in APB which it does not already own under Singapore regulations on takeovers and mergers, the Dutch firm said in the statement.
Heineken will offer Sg$50 per share to acquire the outstanding stock of APB, it said.
"The transaction is a validation of APB's success, its business model, leading brands and strong management team," said Lee Hsien Yang, chairman of F&N.
"While all of us at F&N maintain a strong emotional attachment to APB and the Tiger beer brand, this offer price of $50 represents an attractive premium."
A huge billboard advertising Tiger Beer, brewed by Asia Pacific Breweries (APB), in Singapore. Dutch brewer Heineken said Friday it has reached a deal to buy the Asian brewing group that makes Tiger beer for $4.1 billion, as it seeks to bolster its presence in the fast-growing region.
He added that "the sale of APB allows us to immediately unlock substantial value in the beer business, which is consistent with our intent to maximise returns for F&N shareholders."
Analysts have said that Heineken's offer could spark 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.
But Senji Miyake, president of Japanese brewer Kirin which owns 14.7 percent of F&N, said in Tokyo earlier Friday that his company was not interested in taking control of APB, Dow Jones newswires reported.
"We invested in Fraser & Neave because of our main interest in its food and beverage operations, and we are absolutely not considering what we can do on Asia-Pacific Breweries," Miyake said at a press conference after release of the Kirin's first-half results.