The Asian Beer Wars Have Started

* Heineken NV, the world’s third- biggest brewer, will offer up to $6 billion to take over Asia Pacific Breweries Ltd., blocking one of Thailand’s richest men from building his influence in the maker of Tiger beer.

* Heineken, with 42 percent of Asia Pacific Breweries or APB, will pay as much as S$7.5 billion ($6 billion) to buy out other shareholders in the Singapore company, including the 40 percent stake held by Fraser and Neave Ltd., or F&N.

* Thai Beverage Pcl, controlled by billionaire Charoen Sirivadhanabhakdi’s TCC group, this week offered to buy a 22 percent stake in F&N while his son-in-law’s company is buying about 8.4 percent of APB.

* The deal would be Heineken’s largest acquisition after offering $7.4 billion in 2010 for the beer operations of Coca- Cola bottler Fomento Economico Mexicano SAB, or Femsa

* Heineken, which has been involved with APB since 1931, is trying to stop Charoen from seizing control at a time when brewing assets in attractive markets are in short supply

* The S$50 per share offer is 19 percent premium to APB’s closing price yesterday of S$42. That compares with an average premium of 25 percent paid in 45 takeovers of beermakers announced in the last two years.

* The stock was suspended from trade today due to Heineken’s announcement.

* The world’s largest brewers are making acquisitions in emerging markets to get exposure to areas where beer-drinking is rising faster.

* Anheuser-Busch InBev NV, the world’s biggest brewer, in June agreed to buy the remainder of Mexico’s Grupo Modelo SAB for $20.1 billion in cash, gaining full control of the Corona maker to increase its presence in emerging markets.

* Aberdeen: APB would fit better with Heineken’s assets than in Charoen’s Thai Bev empire, said Hugh Young, Singapore-based managing director at Aberdeen Asset Management Asia Ltd. 'It’s Heineken’s DNA as a business,' Young said. 'Yes, the Thais brew beer as well but Heineken has really been the founding father,' he said, adding that the S$50 a share offer was 'quite high.'

* Aberdeen said it owns 7 percent of Oversea-Chinese Banking Corp., or OCBC, as well as less than 1 percent of F&N and less than 0.1 percent of APB. Thai Bev bought its 22 percent stake in F&N from OCBC.

* Chareon’s holdings of publicly traded assets are worth $6.1 billion

* Thai Beverage: It’s Heineken’s 'right to move,' Vichate Tantiwanich, a Thai Bev spokesman, said today in a mobile-phone text message, adding that the Thai company’s purchase of the F&N stake would 'go on.'

* The deal values APB at about S$13 billion, including S$43 million of net debt held on March 31. That’s about 17 times the S$754 million in earnings before interest, tax, depreciation and amortization the company recorded in the 12 months to the end of March.

* In nine brewery takeovers worth more than $1 billion over the past five years, the median multiple for the same pretax earnings measure has been 13

* Heineken is trying to extend its reach in emerging markets, with acquisitions in India, Brazil, and Africa in recent years as well as the Femsa takeover

* Heineken’s Chairman Jean-Francois van Boxmeer said in a statement that the changes in APB’s and F&N’s shareholder lists meant the 'fabric of the partnership' over APB had changed. The Amsterdam-based company 'will review all options available to protect its commercial interests' if it wasn’t able to agree a 'consensual deal' with F&N

* The deal, if it went through, would be Heineken's largest after it offered $7.4 billion in 2010 for the beer operations of Coca-Cola bottler Fermento Economico Mexicana SAB or Femsa

* Besides the Singaporean Tiger brand, APB has rights to brew Bintang beer in Indonesia, Anchor in China, Southeast Asia and Sri Lanka, and Heineken from China to New Zealand.

* Heineken: 'We’re very interested in keeping access to these markets,' Heineken spokesman John-Paul Schuirink said by phone from Amsterdam. 'Asian beer markets are booming right now.'

* Rising incomes in emerging markets have made breweries in Asia attractive to beer, wine and spirits companies, as consumption levels are expected to rise over time to match developed markets. Asia has large populations with a higher proportion of younger consumers coupled with an expanding middle class. As incomes rise, alcohol consumption will increase and consumers will acquire the taste for premium products. Heineken accounts for 8.8% of the global beer market and has the smallest emerging markets presence and about 37% of its operating income in 2011 came from Europe

* Blue Phoenix Financials: According to Euromonitor International, the global retail market for finished beverage products is about $1.2 trillon. Between 2007 and 2011, sales grew 7% annually. The leader in terms of revenues is Anheuser Busch with $36.30 billion of revenues, while Heineken is ranked fifth with revenues of $21.40 billion. Kirin Holdings is sixth at $19.83 billion, Diageo seventh at $15.47 billion and SABMiller eighth at $14.20 billion.

Asia Pacific Breweries Ltd (APB) reported profit of +30% to $270 million in 2Q 2012 with increased sales in Vietnam, Indonesia and Papua New Guinea. APB has a market capitalization of S$10.84 billion, which is larger than China's Tsingtao Brewery at S$9.92 billion and India's United Breweries at S$3.03 billion. APB has delivered an average EPS of 29.83% for shareholders and pays a gross dividend yield of about 2.21%, higher than Anheuser Busch's 1.85%, San Miguel's 1.66% and United Breweries' 0.14%. Trading at about 31 times earnings, its more attractive than Philippines' San Miguel at 48 times earnings. Before trading was halted, APB has delivered a year-to-date return of 51.16%.

Top 5 Shareholders of APB

* Asia Pacific Investment 64.80%

* Heineken International 9.49%

* Kindest Place Group 8.60%

* Fraser & Neave 7.26%

* OCBC 3.02%

* Institutions own 68.02% of APB shares

* US Investors own 87.70% of APB shares

* Singapore Investors own 12.14% of APB shares

* Asset Allocation Funds own 29.94% of APB shares


Guinness Anchor Bhd (GAB) engages in the production, packaging and distribution of beverages under the Tiger, Guinness, Heineken, Anchor Smooth, Anchor Strong, Kilkenny, Paulaner and Sol brands and the company is based in Petaling Jaya, Malaysia. In 3Q 2012 ended Mar 31, GAB posted a 5.23% increase net profit to M$51.1 million on the back of a 3.64% increase in revenue to M$364.71 million. Earnings per share increased to 17.06 sen from 16.21 sen. For the nine-month period, GAB recorded an increase of 13.3% in its net profit to M$172.56 million while revenue increased by 12.08% to M$1.28 billion. EPS grew by 57.12 sen compared to 50.41 sen in 2011, while net assets per share stood at M$1.24 billion as at Mar 31, 2012. The company also has cash of M$196.72 million in the period. GAB has a market capitalization of M$4.26 billion, bigger than Japan's Sapporo Holdings at M$3.91 billion. GAB pays an attractive gross dividend yield of 3.86% compared to 0.71% at China's Tsingtao Brewery, 1.85% at Anheuser Busch, 2.98% at Kirin Holdings and 2.37% at SABMiller. GAB has posted a year-to-date return of 11.36%.

Top 5 Buyers Of Guinness Anchor Bhd

* Schroder Inv Mgmt 1,421,800 shares

* Wasatch Advisors 853,500 shares

* Vontobel Asset Mgmt 813,105 shares

* Driehaus Capital Mgmt 46,200 shares

* AXA Rosenburg Int'l 30,000 shares


Top 10 GAB Shareholders

* GAPL 51.00%

* Aberdeen Asset Management 5.07%

* Vontobel Asset Mgmt 1.78%

* Wasatch Advisors 0.84%

* Harris Trust & Savings 0.60%

* Schroder Inv 0.47%

* Union Inv 0.36%

* Aberdeen Asset Mgmt Asia 0.28%

* Danske Inv Mgmt 0.20%

* Danske Inv A/S 0.19%

* Institutions own 61.47% of GAB shares

* Singapore Investors own 83.42% of GAB shares

* Emerging Market Funds own 50.99% of GAB shares

* Regional Funds own 40.67% of GAB shares

* On 12 June 2012, Aberdeen Asset Management bought 10,800 shares of GAB at 13.44

* On 7 June, Aberdeen Asset Management bought 6,531 shares at 13.32


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