F&N to Sell Myanmar Brewery Stake at $560 Million After Dispute

Fraser & Neave Ltd. will sell its stake in Myanmar Brewery Ltd. at more than double the price offered by local partner Myanma Economic Holdings Ltd., capping a two-year dispute over the Asean country’s leading beermaker.

F&N will sell its 55 percent share in the brewer at $560 million to MEHL, the partners announced separately. MEHL had sought to compel F&N to sell the stake for $246 million, while an independent valuer estimated July 22 that it was worth $560 million, Singapore-based F&N said last month.

F&N is exploring other ways to access Myanmar’s beer drinkers after the sale as “it’s a very good market”, F&N’s head of investor relations Jennifer Yu said via telephone Thursday. The deal will be completed on or before Aug. 20 when the amount is paid, said MEHL in an e-mailed statement.

Myanmar’s emergence from economic isolation in 2012 has drawn consumer companies from Heineken NV to Coca-Cola Co., keen to access its estimated 54 million consumers. Heineken and Carlsberg A/S have both opened breweries in the Asean country, where beer sales are forecast by Euromonitor to reach $675 million by 2018.

Legal Claim

F&N shares rose as much as 3.5 percent, the biggest increase in 11 months, and were up 1.3 percent at S$2.29 as of 2:50 p.m. in Singapore trading. The food and drinks-maker controlled by Thai billionaire Charoen Sirivadhanabhakdi said Wednesday it will make a separate announcement with further details on the transaction.

MEHL, a Myanmar army-linked organization, had filed a claim in late 2013 for F&N to sell out of Myanmar Brewery. The two companies had set up the Yangon-based maker of Myanmar Double Strong and Andaman Gold beer in a joint venture in 1995.

An arbitral tribunal had ruled in October 2014 that MEHL’s offer didn’t represent a fair value of F&N’s stake. The tribunal ordered the two companies to complete the deal within 30 days after the independent valuer’s report on July 22, according to MEHL on Thursday.

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