Comment - Wehring's Way: Heineken, Fraser & Neave and Asia Pacific Breweries
There will be a lot of relieved beers being downed in Amsterdam tonight. And, while the folk at Heineken will be keen to hedge their bar spend, they'll still want to celebrate today's news.
After being made to wait a week, Heineken finally got the green light from its friends at Fraser & Neave to make a move for the latter's stake in the Asia Pacific Breweries JV. At a cost of US$4.09bn, F&N's holding isn't cheap for Heineken, but the brewer didn't have much of a choice.
After ThaiBev moved to up its stake in F&N to 24.1% late last month, and the son-in-law of ThaiBev's owner bought 3.4% of APB itself, Heineken knew that the writing was on the wall for the JV. Within a matter of days, it pitched an offer to F&N to end their alliance of 80 years.
On the date of the deadline for Heineken's offer, F&N asked for another week to do the maths. I don't know what the phrase 'squeaky-bum time' translates to in Dutch, but I imagine the executive team will have had their fingers crossed throughout this week.
As I said, the agreed price isn't cheap: At 21x enterprise value to EBITDA, the transaction is nearer the higher end for M&A activity (Remy Cointreau's 24x EV/EBITDA purchase of Bruichladdich last month prompted many gasps), but the alternative for Heineken doesn't bear thinking about. The beer markets of China and South-East Asia are some of the main battlegrounds at the moment. To have to worry about who owns how much of APB would have been an unwelcome distraction, at best.
Whatever. I'm looking forward to the transaction going through, if only to nail down the ownership structure of APB. I've ended up cross-eyed more times than I care to remember in recent years as I've tried to explain the set-up.
Between them, Heineken and F&N own Asia Pacific Investment Pte Ltd, which holds about 65% of APB. Independently, Heineken owns about 9.5% of APB, while F&N has about 7.3% of APB.
How are your eyes?
In the fourth part of Euromonitor's preview of 2013, alcoholic drinks analysts Spiros Malandrakis and Zsuzsa Szilagyi consider what the future holds for the world's brewers....
He's back, Back, BACK. After an absence of almost two years, we're delighted to welcome Larry Nelson, the publisher of Brewers' Guardian, back into the just-drinks fold. and, to kick things off again,...
- Are we kidding ourselves over craft spirits?
- What's behind Brown-Forman's Irish whiskey plans?
- Is Brown-Forman doing a Jack Daniel's in Ireland?
- How good a sustainability fit are ABI and SAB?
- Interview - Heineken global activation director
- Diageo, Treasury Wine Estates quiet on wine sale
- Chandon to become "third pillar brand" for MH
- Brown-Forman silent on Southern Comfort report
- Pay freeze anger threatens Carlsberg UK site
- Stoli appoints international marketing director
- The IWSR Duty Free/Travel Retail Report 2015
- Future growth opportunities for global spirits
- Global gin insights - market data, product innovation and consumer trends research
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends research
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research