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Jonathan Kwok

The Straits Times

Publication Date : 02-02-2013

Japanese brewer Kirin Holdings has agreed to sell its 14.76 per cent stake in Fraser & Neave (F&N) to Thai tycoon Charoen Sirivadhanabhakdi for about S$2 billion (US$1.6 billion).

Kirin's move, announced yesterday, answers a final key question in the F&N takeover saga and boosts Charoen's already commanding control of the drinks and property group.

Charoen's Thai Beverage and TCC Assets already hold 54.01 per cent of F&N, including acceptances of his S$9.55 per share general offer.

So Kirin's acceptance of his offer will take Charoen's stake to about 68.8 per cent.

Kirin had bought the bulk of its stake in July 2010, from Temasek Holdings.

It then dispatched an executive officer, Hirotake Kobayashi, to sit on F&N's board, to "explore and discuss opportunities for collaboration in South-east Asia in line with Kirin's integrated beverages strategy".

A Kirin statement yesterday went on to cite the "recent major change in F&N's ownership structure, weighted heavily to TCC" in Kirin's decision to sell. It said it would now be difficult to partner with F&N to implement its beverages strategy in South-east Asia.

Still, Kirin will be profiting significantly from the sale. It paid S$6.50 a unit for its shares from Temasek, and now Charoen's TCC Assets will pay it S$9.55.

Kirin said it will receive about S$2 billion for its stake. This will secure a profit on sale of about 47 billion yen (US$510 million), before tax. The brewer said it will continue pursuing its integrated beverage business strategy in Southeast Asia - through Kirin Holdings Singapore, as well as its other regional units such as Vietnam's Interfood Shareholding Company, and Siam Kirin Beverage in Thailand.

Kirin also said it would seek new opportunities to cooperate with local and regional partners.

Market chatter had been growing this week that Kirin would sell its stake despite official word that no decision had been made yet.

F&N's directors had said on Tuesday that they would resign en masse after the close of Charoen's general offer, to give the billionaire a free hand as he takes over the company.

Kobayashi is resigning from the board as well, interpreted by observers as a sign that Kirin was looking to offload its F&N stake.

Charoen's offer, which values F&N at S$13.75 billion, went unconditional on Wednesday. This came after his stake including acceptances crossed 50 per cent.

His offer will remain open for acceptances until February 18.

Charoen had won a two-month tussle with property company Overseas Union Enterprise, which withdrew from the bidding war over F&N last month.