This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Heineken Takes a Keg Stand in Beer Wars With $4.1B Tiger Bid (Update 1)

Stocks in this article: BUD TAP

Updated to reflect additional analyst comments and industry data

NEW YORK ( TheStreet) -- Heineken is the newest global beer giant to enter the M&A market, amid a high stakes land grab for brewing assets in fast-growing emerging markets as drinkers in North America and Western Europe cut back on the suds.

On Friday, Heineken offered to buy the remaining shares of Singapore-based Asia Pacific Brewers, the maker of Tiger Beer, in a move to fend off a rival bid from Asian drinks conglomerate Thai Beverage. Already, Heineken owns a 42% stake in Asia Pacific Brewers, a stake that dates back to 1931.

With full control of APB, Heineken would join beer giants like Anheuser-Busch InBev (BUD), Molson Coors (TAP) and SABMiller (SBMRY) in cutting multi-billion dollar deals for brewers in emerging markets like Asia, Latin America and Eastern Europe. The beer sector merger wave also comes at a time when Euromonitor estimates that beer consumption in North America and Western Europe will stall in coming years.

''If agreed, the offer will strengthen Heineken's platform for growth in some of the world's most exciting and dynamic economies with fast-growing populations,'' Heineken said in a statement on Friday. The move would also give Amsterdam-based Heineken, "'direct access to a number of important markets, including Cambodia, China, Indonesia, Malaysia, New Zealand, Papua New Guinea, Singapore, Thailand and Vietnam," the company added.

Heineken, which accounts for just under 10% of the global beer market, has a smaller emerging markets presence than peers ABInbev and SABMiller. Bloomberg Industries analysts also note that were Heineken's bid to be accepted, it would leapfrog SABMiller as the world's second largest brewer.

The beer maker's $4.1 billion bid for the remaining shares of APB comes at a near-20% premium to the brewer's share price in the Singapore market, and tops a bid made by Thai Beverage earlier in the week. Both brewers are bidding on a 40% stake owned by Singapore-based food & beverage, property and publishing conglomerate Fraser & Neave. If its bid is accepted, Heineken would take control of APB, a company it's been involved with since the early 1930s.

Asia Pacific Breweries operates 30 breweries across Asia, in counties like Mongolia, and Papua New Guinea. The company owns popular regional brands like Tiger Beer and Bintang lager.

Heineken's bid may not be the end of the battle, though.

"In our view, this is far from certain," wrote Berenberg Bank analyst Phillip Morrisey, in a note to clients. " The strategic/regional ambitions of Thai Beverage and perhaps more so Kirin, as well as the apparent historic reluctance of F&N to exit APB, suggest a deal may prove difficult to complete," Morrisey adds.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs