Heineken to Buy Tiger Beer Maker for $4.

1 Billion
There was historical business transaction in 2012 when Dutch brewer Heineken has reached
a deal to take over Asian brewing group that creates Tiger beer for $4.1 billion as it seeks to
expand the market share 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 a takeover of APB -- which makes Tiger beer and
other brands popular across Asia, including the Chinese market -- would give it direct access
to the region. Heineken at that time owned 41.9% of APB, one of Southeast Asia's biggest
brewers, and taking F&N's 40% will give the Amsterdam company a distinctive edge over
Thai Beverage Ltd., owned by tycoon Charoen Sirivadhanabhakdi. APB shares reached as
high as Sg$52.00 after Heineken first announced its takeover bid on July 20. The shares
closed at Sg$49.50 on Wednesday before trading was suspended pending Friday's decision
on the offer. A successful deal will bring Heineken's stake in APB to nearly 82%, more than
enough to trigger a mandatory offer for the shares it does not already own.

A Complicated Ownership Structure

In a complicated ownership structure, Thai Beverage and Japanese brewer Kirin together
have a 39.1% stake in F&N and their votes will be a crucial factor for the Heineken offer to
be successful, Dow Jones Newswires reported.
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% over the one-month volume weighted
average price per share, for a total of Sg$5.1 billion.
F&N said APB operates an extensive global marketing network spread across 60 countries.
This network is supported by 30 breweries in 14 countries including Singapore, Cambodia,
China, Indonesia, Laos, Malaysia, Mongolia, New Caledonia, New Zealand, Papua New
Guinea, Solomon Islands, Sri Lanka, Thailand and Vietnam, it said.
Data from international business consultancy Euromonitor showed that the Asia Pacific is
the biggest beer market in the world, accounting for 35.3% of the total volume last year, up
from 34.4% in 2010.
Total volume in 2011 at 66.97 million liters is expected to rise to 84.55 million liters by 2016,
Euromonitor said.
Analysts had said that Heineken's offer could spark a takeover battle with Thai and Japanese
investors for control of APB.
But Senji Miyake, president of Japanese brewer Kirin which owns 14.7% of F&N, said in
Tokyo earlier Friday that his company was not interested in taking control of APB, Dow
Jones said.
Benefits of Heineken after taking over Tiger
Heineken was boosted by increased sales of its Tiger and Amstel beers in the first half of the
year as the Dutch brewer saw its net revenue grow by 5.6% on an organic basis. Moreover,
Net revenue for these six months to the end of June was €11.45 billion, while operating
profit grew by 0.3% on a like-for-like basis to €1.78 billion. Furthermore, Beer sales volumes
increased in all the company’s markets except Europe, which declined as a result of poor
weather and an unfavourable comparison to last year when the football World Cup took
place. The firm’s international brand portfolio grew high-single-digit, driven by the double-
digit growth of Tiger and Amstel. Tiger performed strongly in Vietnam and more than
doubled its volume in Cambodia, while Amstel grew strongly in Brazil, South Africa, Russia
and the UK. Heineken brand volume increased 6.9% organically over the first half, with
growth in all regions. The brand grew double-digit in Brazil, Mexico, South Africa, Russia,
Nigeria, the UK, Portugal, Germany and Romania, among others. The company’s low- and
no-alcohol volume increased high-single-digit, driven by Heineken 0.0, which went on sale in
2017. Heineken CEO Jean-François van Boxmeer said: “Top-line performance was again
strong in the first half of 2019, with organic net revenue growth across all regions and
double-digit growth in Asia Pacific as well as Africa, Middle East and Eastern Europe. For
2019, Heineken said it expects to deliver “superior top-line growth” driven by volume, price
and premiumisation.
In conclusion, this $4.1 Billion deal is one of the greatest transaction one the world business
history, it not only brought up the Heineken brand identity but it also turned its rivals to part
of them with the aim to dominate the beer market in the world.