COCA-COLA Co, the world’s largest soft-drinks maker, is exploring a bid for the bevera-ge business of Singapore’s Fraser and Neave Ltd, according to several people with knowledge of the matter.
A bid for the F&N business held under F&N Foods Pte and Kuala Lumpur-listed Fraser & Neave Holdings Bhd may pit Coca-Cola against Japan’s Kirin Holdings Co, which is also considering making an offer.
The operations would give Coca-Cola chief executive officer Muhtar Kent the biggest share of soft-drink sales in Malaysia and Singapore, according to Euromonitor International data. The unit, including F&N’s dairy and soft-drinks businesses, may be worth as much as US$3 billion (RM9.39 billion), said two of the people, who asked not to be named as the process is private.
“It’s a very dominant player in Malaysia,” said Lim Jit Soon, Singapore-based analyst at Nomura Holdings Inc. “They have a very strong brand in 100-PLUS, which is recognised around the region,” Lim said, referring to F&N’s sports drink brand.
F&N also owns a real- estate business with shopping centres, serviced apartments and industrial property. Real estate accounted for S$2.1 billion (RM5.27 billion) in sales last year, 34 per cent of the total, data show. Dairy business sales were S$1.1 billion in 2011, while the soft drinks unit had S$759 million of revenue, the data show.
Coca-Cola hasn’t made a decision and is waiting to see what other suitors do, said another person.
F&N yesterday requested a halt in trading of its shares pending an announcement. Jennifer Yu, a spokeswoman for F&N, declined to comment on Coca-Cola’s interest or the reasons for the trading halt. Kent Landers, a spokesman for Coca-Cola, said he couldn’t comment on market speculation, and Kirin spokeswoman Nahoko Abe also declined to comment.
Coca-Cola and Kirin are considering bids for F&N’s food and drinks business after Heineken, the world’s third-biggest brewer, last month offered as much as S$7.5 billion to take over a brewer that is jointly run by the Dutch company and F&N. F&N owns 40 per cent of Asia Pacific Breweries Ltd, while Heineken owns 42 per cent. APB, which brews Tiger beer and Heineken, was also halted yesterday in Singapore.
“If you agree to sell Asia Pacific Breweries, it would seem perfectly natural to sell other parts of the businesses too,” said Jonathan Foster, Singapore-based director of Global Special Situations at Religare Capital Markets. “There is a bigger game other than APB being played out here.”
The Dutch brewer’s July 20 bid came two days after Thai Beverage pcl, the brewer of Chang Thai Beer, struck a deal to buy a 22 per cent stake in F&N. At the same time, a company affiliated with ThaiBev’s billionaire owner Charoen Sirivadhanabhakdi purchased almost 9 per cent of APB. Bloomberg
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