Heineken agrees Asia Pacific Breweries deal

28 September, 2012
Asia Pacific Breweries

Asia Pacific Breweries's portfolio

Heineken has strenghtened its position in Asia with the US$4.3bn deal to buy Fraser & Neave’s interest in Asia Pacific Breweries (APB).

The move, announced at Heineken’s Extraordinary General Meeting in Singapore today (September 28), will up the Dutch brewer’s share in APB from 55.6% to 95.3%.

The purchase is set against a backdrop of strong and growing beer sales in Asia Pacific. The region has driven global beer sales in recent years, while traditional, mature beer markets such as North America and Europe have endured sluggish or flat growth.

Among APB's 40-brand portfolio of owned and distributed brands are Tiger beer, Heineken, Anchor beer, Baron’s Strong Brew, ABC Extra Stout, Archipelago beers and Bintang beer.

Jean-François van Boxmeer, Heineken chairman and chief executive officer said: “Once completed, this transaction will further increase Heineken’s financial and geographic exposure to emerging markets and strengthen our competitive position in one of the most exciting regions in the world.

“Our regional headquarters will remain in Singapore with the Heineken and Tiger brands at the heart of our portfolio. We are now ideally positioned to expand our presence across the region and create long-term financial and strategic value for our shareholders.”

Zsuzsa Szilagyi, alcoholic drinks research analyst at Euromonitor International said of the move: “The deal came as no surprise, as ThaiBev, which became the largest shareholder of F&N following a series of share buys, agreed to vote in Heineken’s favour earlier this month.

“As mature beer markets in Europe and North America are forecast to remain sluggish over 2011-2016, while Asia Pacific is expected to continue to drive global volume growth, the move increases Heineken’s growth prospects and ensures its position among the leading brewers.

“Just like other major brewers, Heineken has also been increasingly focusing on emerging markets. Through the deal the company becomes the leading brewer in Indonesia and Singapore and can also benefit from APB’s established presence in Malaysia, Vietnam, Thailand and China. Moreover, the deal is expected to boost the company’s margins as well in the region, as APB has a strong position in premium lager, with its key Tiger brand enjoying widespread distribution.”

The transaction remains subject to regulatory approvals in Singapore and New Zealand and is expected to be complete in November 2012, after which APB will be fully consolidated into Heineken's accounts.

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