Heineken swallows Tiger as it aims for Asian sales growth

Heineken won the battle to buy the maker of Tiger beer yesterday as it clinched a $6.4 billion (£4bn) deal aimed at strengthening the Dutch brewer’s position in fast-growing Asian markets.

Shareholders of Singapore conglomerate Fraser & Neave backed the sale of their 39.7 per cent stake in Asia Pacific Breweries (APB) to the world’s third largest brewer.

The agreement and other recent share purchases means Heineken controls 95 per cent of APB and ends its battle with companies linked to Thai billionaire Charoen Sirivadhanabhakdi for control of the Asian brewer.

Heineken, which swallowed Scottish & Newcastle in 2008 in a joint swoop with Danish peer Carlsberg, conceded it had paid “full price” for APB but said the average financing costs for its purchase were expected to be less than 3 per cent a year. Chief executive Jean-Francois van Boxmeer said the deal would boost the company’s exposure to two of the fastest-growing regions for beer in the world – south-east Asia and the Pacific Islands, and China.

Heineken will focus on higher-margin premium brands such as Anchor, Heineken and Tiger, for which growth was forecast at 8 per cent per year in south-east Asia and 12 per cent in China, and push Tiger into other markets, including Europe.

The south-east Asia and Pacific Islands market would grow by an average 4.8 per cent per year to 2020 – faster than Africa, eastern Europe and Latin America.

Heineken has owned part of APB via a joint venture with Fraser & Neave for nearly 80 years, but began working hastily to increase its stake in July. It had to raise its bid for Fraser & Neave’s stake to ward off its rival Thai bidder, and it also bought shares on the open market and from smaller stakeholders.