Heineken orders a Tiger for $4.1bn

The folks at Heineken are obviously looking for a different accompaniment to their Friday night curry, and they're prepared to spend the equivalent of £2.6bn on it.

by Michael Northcott
Last Updated: 19 Aug 2013

Arguably one of the best lagers to have with a spicy dish, Tiger beer is owned by Asia Pacific Breweries, and Heineken wants to buy out the stake in the group that it does not already own. It has put in a bid of 5.1bn Singapore dollars and is keen to get the deal done to avoid losing ground to its competitors in emerging markets. 

Currently, the stake in question is owned by Fraser & Neave (F&N), but the board now has a $50 per share offer to mull over. Preferably over a drink.

India is one of the fastest growing economies, and along with China, both countries have a burgeoning middle class growing accustomed to a plethora of western habits, style and fashions. Heineken’s stake in APB is currently only 9.5%, but in recent years the firm has acquired the brewing operations of FEMSA in Mexico and Brazil, the partnership with United Breweries in India as well as acquisitions and capacity investments in Africa - they haven’t been standing still where global expansion is concerned. 

We reckon Heineken may have been jolted into action after Thailand’s largest brewer, ThaiBev, offered to buy a swathe of shares in F&N and APB. Heineken is certainly a pre-eminent brand in Europe and the US, but with sputtering economies left, right and centre, the money is not pouring in in quite the way it used to. Even some of the emerging economies are suffering a slowdown in the pace of growth; so getting a foothold in those markets while times are tougher will probably mean a better price, too.

If the deal goes through, we fully expect CEO Jean-François van Boxmeer to nip down to the local with a couple of pals to sink a few.

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