Insight: Tiger time - the billionaire, the brewer, and a battle for the bottle

Thu Sep 27, 2012 5:00pm EDT
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By Saeed Azhar, Eveline Danubrata and Philip Blenkinsop

SINGAPORE/BRUSSELS (Reuters) - As a two-month battle with Heineken (HEIN.AS: Quote) for control of Tiger beer risked turning ugly, Thai billionaire Charoen Sirivadhanabhakdi telephoned Lee Hsien Yang, chairman of Singapore conglomerate Fraser and Neave (F&N) FRNM.SI, the brewer's co-owner.

After speaking to Lee, the younger brother of Singapore's prime minister, on September 12, Charoen called Heineken to offer a truce: his companies would accept the Dutch group's $6.3 billion bid to buy F&N and other shareholders out of Tiger beer maker Asia Pacific Breweries (APB) APBB.SI. Charoen, the son of a Bangkok street vendor, would be left to offer $7.2 billion to add F&N's soft drinks and property empire to his own.

Interviews with at least eight people close to the companies and the negotiations show how the warring parties came up with a deal that surprised analysts and avoided meltdown at F&N.

Charoen's Thai Beverage (TBEV.SI: Quote), the country's leading beer and spirits group, and allies had built up a more than 30 percent stake in F&N, and had said it was working with a partner to make an offer for all of the group - a move described at the time by one person close to the negotiations as "explosive".

"It could have been that the Thais understood Heineken may really have been prepared to trigger the nuclear option and blow everything up. It would have been destructive for F&N," said a person close to Heineken, the world's No.3 brewer.

F&N shareholders are expected on Friday to approve the sale of a 40 percent stake in APB to Heineken. That leaves the Thai offer for F&N on the table, with a possible break-up of the group's soft drinks and property interests.

BLIND-SIDED   Continued...

Bottles of Tiger and Heineken beers are pictured on the shelf of a grocery store in Singapore in this July 20, 2012 file photo. REUTERS/Tim Chong/Files