Heineken NV has spent another $4 billion to take control of Tiger Beer as part of the company’s strategy of expanding significantly into Asia. Singapore based Fraser & Neave’s shareholders agreed on Friday to sell their stake of 39.7% of Asian Pacific Breweries to Heineken. Asian Pacific Breweries own Tiger and a number of other brands of beer that are very popular throughout Asia.
Following the agreement on Friday and through other share purchases made recently, Heineken now controls about 95% of APB. In all, Heineken will have spent over $8.9 billion to increase its stake in APB from 42% to the current 95%.
Jean-Francois van Boxmeer, Heineken’s CEO said the business wanted to make a big and bold move into the region that is still considered a growth market for many years. CEO van Boxmeer did concede that Heineken had paid full price for the purchase of APB, but he said great potential returns are available. He said it was forecasted that China’s premium beer segment, in which both Tiger and Heineken operate, would increase by 12% each year through the year 2020.
Following the deal, close to 55% of operating profits of Heineken will come from economies that are high growth, said van Boxmeer. Heineken also believes that it will benefit from selling Tiger beer around the globe as many beer drinkers enjoy drinking something out of the ordinary and exotic that is not from where they live.
Other brands owned by APB include DB Bitters, Baron’s Strong Brew, Anchor and ABC Stout. In New Zealand, it brews Tui, in Indonesia, Bintang and Guinness Anchor Berhad in Malaysia.