LONDON â€" Heineken's expansion into Asia is not going smoothly.
The Dutch brewer's efforts to secure a controlling stake in Asia Pacific Breweries has taken a hit after Thai Beverage increased its stake in Fraser & Neave, the Singapore-based conglomerate that had agreed to sell its rights in the Asian brewer to Heineken for around $4.1 billion.
By increasing its position in Fraser & Neave to 26.2 percent, Thai Beverage becomes the company's largest shareholder, putting the brewer in a strong position to dictate whether Fraser & Neave shareholders support Heineken's takeover offer.
Kindest Place, a separate company controlled by the son-in-law of Thai Beverage's chairman, also has bought an 8.6 percent stake in Asia Pacific Breweries. Earlier this month, the company had offered to buy Fraser & Neave's 7.3 percent direct stake in the Asian brewer.
The jockeying may force Heineken, which plans to use Asia Pacific Breweries' market share across the reg ion to bolster its own operations in Asia, to increase its offer for the 40 percent stake in the Asian brewer that Fraser & Neave owns through a joint venture with Heineken.
Analysts say Heineken may have to raise its $40-a-share offer to around $44 to secure control of Asia Pacific Breweries without having Thai Beverage as a vocal minority owner.
“We think that Heineken would prefer not to have Thai Bev as an ongoing minority within A.P.B., which could continue to restrict how that company is managed,†Nomura analysts said in a note to investors.
Thai Beverage's stake is not Heineken's only potential problem. The Japanese brewer Kirin also owns a 15 percent share of Fraser & Neave, and may look to acquire the company's soft drinks business.
Fraser & Neave shareholders are expected to vote on Heineken's takeover offer by early September. If approved, the deal will by the end of the year.
The efforts to control Asia Pacific Breweries come as brewers are turning to emerging markets because of a slowdown in Western economies.
Earlier this year, Anheuser-Busch InBev, whose beer brands include Budweiser and Stella Artois, agreed to buy the half of the Mexican brewer Grupo Modelo that it did not already own for $20.1 billion.
SABMiller also bought Foster's Group, the biggest beer company in Australia, for $10.15 billion late last year.
