Blog: Fraser and Neave facing break-up after letting Tiger loose

Chris Mercer | 3 August 2012

A break-up of Fraser and Neave, the Singapore food and drink group, is looking more likely after it agreed to back Heineken's offer to buy full control of the two firms' beer joint-venture.

Heineken said today (3 August) F&N's board will recommend shareholders vote in favour of the Dutch brewer's offer for Asia Pacific Breweries, valued at SGD$50 per share.

If the deal goes through, some analysts believe F&N could be saying goodbye to more than just its long-standing share in the Tiger beer brewer.

There are suggestions F&N's rump food and soft drinks business could be broken-up. Reports have claimed Japan's Kirin Holdings, which already owns 15% of F&N, may already have this scenario in mind, although it has been coy about its intentions so far.

Explaining why Kirin is likely to vote in favour of Heineken's buyout, Sanford Bernstein analysts said: "We believe it is likely that Kirin will vote in favour, because it secures the gain on their investment and makes a break-up of F&N more likely, in which they could end up with the soft drinks & dairy."

ThaiBev, which acquired 22% of F&N last month and so triggered this whole chain of events, would probably not be able to block the APB deal, if Kirin votes to back it, the analysts believe.

Even if Heineken can tie-up APB relatively quickly - and that is by no means a given - this saga still has a lot of legs.

Coca-Cola is, reports say, also mulling a bid for F&N's soft drinks business.


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