Kirin to Sell Frase & Neave Stake to Thai Billionaire

Kirin Holdings Co. (2503), Japan’s largest beverage company, agreed to sell its 15 percent stake in Fraser & Neave Ltd. (FNN) to Charoen Sirivadhanabhakdi for S$2 billion ($1.6 billion), strengthening the Thai billionaire’s control.

Kirin will book a 47 billion yen ($510 million) gain before taxes for the year ending December 2013 on the sale to be completed Feb. 14, the Tokyo-based company said yesterday in a statement.

Charoen’s TCC Assets accumulated a majority stake in F&N this week after raising its offer on Jan. 18 to value the 130- year-old property and beverage company at S$13.8 billion. Kirin joined Overseas Union Enterprise Ltd. (OUE), a Singapore-based property company, in a November bid for F&N under a plan for Kirin to take F&N’s food and beverage unit if the OUE group’s bid had succeeded.

“Kirin will need to reconsider its Southeast Asia strategy,” said Mikihiko Yamato, deputy head of research for JI Asia in Tokyo. “If Kirin joined the OUE bid with the intention of selling the stake in the first place, it was an excellent strategy.”

The company plans to maintain its beverage business strategy in the region through its Singapore affiliate and group companies including Interfood Shareholding Co. (IFS) in Vietnam and Siam Kirin Beverage Co. in Thailand, it said in today’s statement.

Kirin rose 2.7 percent to 1,172 yen at the close in Tokyo trading yesterday. The shares have advanced 28 percent over the past 12 months, compared with a 24 percent gain for the broader Topix index.

Charoen gained the upper hand in the F&N takeover battle after OUE failed to match his S$9.55 a share offer. He had offered $S8.88 a share in September, after sparking the battle by agreeing to buy a 22 percent stake in F&N in July.

Kirin and Japanese competitors Sapporo Holdings Ltd. (2501) and Asahi Group Holdings Ltd. (2502) are buying beverage-maker stakes overseas as beer demand slumps at home. Kirin bought the F&N stake from Singapore’s Temasek Holdings in 2010 for S$1.3 billion, according to data compiled by Bloomberg.

To contact the reporter on this story: Yuki Yamaguchi in Tokyo at yyamaguchi10@bloomberg.net

To contact the editor responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net

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