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ThaiBev Agrees To Buy F&N At Bt70bn

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ACQUISITION

ThaiBev agrees to buy F&N at Bt70bn

The Nation

BANGKOK: -- Thai Beverage Plc has agreed to pay US$2.2 billion or Bt70.4 billion for a stake in Fraser and Neave Ltd, the move which may prompt a rating downgrade by Moody's Investors Service.

The Thai company will buy a 22 per cent stake in Fraser & Neave from Oversea-Chinese Banking Corp and its units - Great Eastern Holdings Ltd and Lee Rubber Co, for 2.78 billion Singapore dollar.

According to Bloomberg, the price for F&N at S$8.88 is a 12 per cent premium to yesterday’s close of S$7.96 in Singapore.

OCBC, Singapore’s second-biggest bank, and Great Eastern hold 18.2 per cent of Fraser and Neave and 7.92 per cent of Asia Pacific Breweries.

"The proposed investment is a logical step to fulfilling the company’s vision to be a leading global beverage producer and distributor with commercial excellence, product premiumisation and professionalism. An investment in F&N is highly complementary to the company’s existing capabilities and institutional knowledge in non-alcoholic and alcoholic beverage production and distribution, and will significantly increase the company’s profile in the food and beverage sector," ThaiBev said in a statement.

F&N is the largest beverage company in Malaysia and Singapore with a presence in over 30 countries. It also holds a strategic investment in Asia Pacific Breweries, a local bottler of Heineken beer and the maker of Tiger beer. "The proposed investment immediately diversifies the company’s geographically and is highly complementary to the company’s existing single market focus. The proposed investment will enable exposure to high-growth Southeast Asian markets with attractive demographics and consumer spending trends.

Moody’s today issued a statement, announcing that ThaiBev’s "Baa2" rating is under review for downgrade.

"The review has been prompted by today’s announcement that Thai Bev has submitted a binding offer to acquire a 22% stake in F&N. This investment is expected to cost SGD2.8 billion and is likely to be debt funded, which would in turn pressure the company’s financial metrics at the Baa2 level," said Annalisa Di Chiara, a Moody’s vice president and senior analyst.

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-- The Nation 2012-07-19

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