F&N to sell Myanmar Brewery stake at $560m

F&N to sell Myanmar Brewery stake at $560m

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

F&N will sell its 55% share in the brewer at US$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 on 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.

The food and drinks-maker controlled by billionaire Charoen Sirivadhanabhakdi said Wednesday it will make a separate announcement with further details on the transaction.

MEHL, a Myanmar army-linked organisation, 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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