In the Spotlight - ThaiBev Steps out of Heineken's Way

The Wall Street Journal summed it up best: “Now everyone can finally have a drink.”

ThaiBev this week agreed to support Heineken's bid for Tiger-maker Asia Pacific Breweries (APB) after a long, drawn-out tussle between the two. But Tuesday's (18 September) announcement means the biggest hurdle has now been cleared, commentators said.

“Now Heineken gets the exposure it wants to South-East Asia’s beer drinks, while (ThaiBev owner  Charoen Sirivadhanabhakdi) stands to make a lot of money,” the WSJ said, reckoning the billionaire will add US$1.6bn to his fortune.

Charoen was applauded in Business Week for his deal-making as he now has a clear path to a full takeover of Heineken's JV partner, Singapore conglomerate Fraser & Neave (F&N).

“This is another shrewd move by the Thais,” said Justin Harper, a Singapore-based market strategist at IG Markets. “Charoen has already benefited from Heineken’s offer on the table for APB. He’s made money from that and he can now concentrate on the property and soft drinks side.”

That's something the Financial Times said Charoen planned to do the whole time, with ThaiBev's bid for APB a sideshow.

“Rapprochement between the two pivotal players suggests the Thai strategy was all along more focused on F&N’s non-beer assets,” the FT said. “By submitting a rival bid, the Thais appear to have pushed Heineken into raising its offer and thus their own bounty.”

The Wall Street Journal, quoting someone who works with Charoen suggested his real motives may never be known as he “is very private to the point of being shy”. 

“He doesn't tend to announce his plans," the unnamed source said. “He recognises the business needs to go beyond Thailand, if he wants to grow, as he's already big there.”

His family were doing his talking for him, however. In an interview with The Nation, Charoen's son and ThaiBev's president & CEO Thapana Sirivadhanabhakdi said the company's focus was now on securing F&N.

“What the company has been doing with F&N was quite clear in the eyes of investors and the general public,” he said. “The company has never played games, but is looking for long-term value creation with F&N.

“We are looking to explore opportunities for our beverage business as the main objective.”

But after causing more than a few headaches for Heineken, ThaiBev's path to full ownership of F&N may not run smooth.

“We believe there is more value in (F&N) were it to be fully broken up, and hence, the board is likely to reject the Thai bid,” said broker Religare in a note quoted by the Wall Street Journal, which said could force Charoen to up his offer.