BUSI 1357-Global BusinessMr. Alan GoGroup 2: TRAN LONG, JIN-XIN,DO TON MINH KHOA,BATBAYAR BATTUMURMYUNG SUNNA,WEY CHEN LING,
Content• Background• Companies Overview• Context To The Offer• The Aims Of Heineken’s Strategy• Opportunities and Challeng...
• Slowing growth in mature markets - Western Europe and NorthAmerica• Rising costs and the growing popularity of low-carbo...
• Capitalise on a recent event on 28th September -the Heneiken’s acquisition of Asia Pacific Breweries• Horizontal M&A tre...
• A Dutch brewing company was founded in 1864 byGerard Adriaan Heineken• Europe’s largest brewer and the world’s third lar...
• A leading brewer in Southeast Asia & the PacificIslands• 25 breweries in 14 countries in the Asia - Pacificregion• An ex...
• Thailands largest and one of the largest beveragealcohol companies in South East Asia• 4 segments business line: spirits...
Context to the offerBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusiono...
Context to the offerBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| ConclusionS...
• Expand geographic coverage with access to emerging markets• Improve the operation efficiency, increase market shareThe A...
• Strengthen HEINEKEN’s portfolioThe Aims Of Heineken’s Horizontal Acquisition StrategyBackground | Company Overview| Offe...
• A “must-do deal” to prevent a competitor fromemerging marketsImplicationThe Aims Of Heineken’s Horizontal Acquisition St...
• Heighten its product differentiation• Enhance its image with stakeholders - Heineken shares were up1.2% after the dealIm...
• Asian – Pacific region is growing on population and economicOpportunitiesOpportunities and ChallengesBackground | Compan...
• APB knows well about Asian beer markets• Tiger, Bintang and Anchor of APB are among the most famousbeer brands in AsiaOp...
• Heinekens business in the Asia-Pacific region wasnot well-consolidated• Heineken’s debt ratio increased to 3.3, more tha...
• Heineken has conducted the global strategy throughhorizontal acquisition• Horizontal acquisition helps the companies imp...
Reference• Cavusgil, S. T., Knight, G. and Riesenberger, J. R. (2012) International Business: The NewRealities. 2nd Intern...
Winning full control of apb opportunity or challenge for heineken in asian beer markets
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Winning full control of apb opportunity or challenge for heineken in asian beer markets

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Winning full control of APB Opportunity or challenge for Heineken in Asian beer markets

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Winning full control of apb opportunity or challenge for heineken in asian beer markets

  1. 1. BUSI 1357-Global BusinessMr. Alan GoGroup 2: TRAN LONG, JIN-XIN,DO TON MINH KHOA,BATBAYAR BATTUMURMYUNG SUNNA,WEY CHEN LING,
  2. 2. Content• Background• Companies Overview• Context To The Offer• The Aims Of Heineken’s Strategy• Opportunities and Challenges• Conclusion• Reference
  3. 3. • Slowing growth in mature markets - Western Europe and NorthAmerica• Rising costs and the growing popularity of low-carbohydratebeers and other drinksBeer manufacturing industry• In 2008, Anheuser - Busch accepted the offer of $ 52 billion ofInBev → Anheuser - Busch Indev• In 2011, SABMiller spent a $10.15 billion takeover of Foster’sGroupThe world’s major brewers have to consolidate, employ Globalstrategy to capture greater market share and access intoemerging markets through horizontal mergers and acquisitionsBackgroundBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusion
  4. 4. • Capitalise on a recent event on 28th September -the Heneiken’s acquisition of Asia Pacific Breweries• Horizontal M&A trends in global businessWinning full control of APB: Opportunity orchallenge for Heineken in Asian beer markets?Justification of the Research questionBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusion
  5. 5. • A Dutch brewing company was founded in 1864 byGerard Adriaan Heineken• Europe’s largest brewer and the world’s third largestby volume• Presence in over 70 countries, more than 140breweries with volume of 214 million hectolitres• In 2011, revenue totaled EUR 17.1 billion and EBITwas EUR 2.7 billionCompany OverviewBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusion
  6. 6. • A leading brewer in Southeast Asia & the PacificIslands• 25 breweries in 14 countries in the Asia - Pacificregion• An extensive portfolio of over 40 beer brands.• In 2011, revenue totaled S$2,974 million and EBITwas S$658 million.APBCompany OverviewBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusion1931
  7. 7. • Thailands largest and one of the largest beveragealcohol companies in South East Asia• 4 segments business line: spirits, beer, non-alcoholbeverages and food• The owner, Charoen Sirivadhanabhakdi, is thesecond richest billionaire in Thailand• Control 30.7% shares of Fraser and Neave (F&N)Company OverviewBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusion
  8. 8. Context to the offerBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusionoffered to buy 22 % in F&N forS$2.78 billion18 Jul 20 Jul 7 Aug 17 AugS$5.6 billion offer for thewhole of APBS$5.1 billion offer for thewhole of APBKPG (a company link to ThaiBev)offered for F&Ns direct 7.3%stake in APB
  9. 9. Context to the offerBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| ConclusionS$8.7 billion offer to take fullcontrol of F&N13 Sep 18 Sep 25 Sep 28 SepShareholders of F&N agreedto sell their stake in a beerjoint venture to Heinekenfor about S$5.6 billionAgreed to support Heineken’s bid to gaincontrol of APB on the condition thatHeineken does not make a counter offerfor F&Nacquired KPG’s shares in APB,representing 8.6% of the totalissued share capital of APB
  10. 10. • Expand geographic coverage with access to emerging markets• Improve the operation efficiency, increase market shareThe Aims Of Heineken’s Horizontal Acquisition StrategyBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusion
  11. 11. • Strengthen HEINEKEN’s portfolioThe Aims Of Heineken’s Horizontal Acquisition StrategyBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusion
  12. 12. • A “must-do deal” to prevent a competitor fromemerging marketsImplicationThe Aims Of Heineken’s Horizontal Acquisition StrategyBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| ConclusionBeer products Non-beer products
  13. 13. • Heighten its product differentiation• Enhance its image with stakeholders - Heineken shares were up1.2% after the dealImplicationThe Aims Of Heineken’s HorizontalAcquisition StrategyBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusion
  14. 14. • Asian – Pacific region is growing on population and economicOpportunitiesOpportunities and ChallengesBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusion(Source: The Global Small Business Blog, 2010)
  15. 15. • APB knows well about Asian beer markets• Tiger, Bintang and Anchor of APB are among the most famousbeer brands in AsiaOpportunitiesOpportunities and ChallengesBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusion(Source: Canadean, Plato , APB, 2011)
  16. 16. • Heinekens business in the Asia-Pacific region wasnot well-consolidated• Heineken’s debt ratio increased to 3.3, more than itstarget 2.5• Potential competitors in Asian marketsChallengesOpportunities and ChallengesBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusion
  17. 17. • Heineken has conducted the global strategy throughhorizontal acquisition• Horizontal acquisition helps the companies improvetheir performance on many aspects: brandexpansion, reputation, market share, and profit• Beside opportunities, there are many challenges forHeineken - Not all the acquisition is completelysuccessfulBig lessons• Analyse data in order to clarify the situation of Heineken andidentify the challenges it may encounter after acquiring APB.Next stepConclusionBackground | Company Overview| Offer Context| Strategy’s aims| Opportunities & Challenges| Conclusion
  18. 18. Reference• Cavusgil, S. T., Knight, G. and Riesenberger, J. R. (2012) International Business: The NewRealities. 2nd International Edition. Prentice Hall: New Jersey.• Danubrata, E. and Blenkinsop, P. (2012) “Heineken wins Tiger battle; focus shifts to F&Nfight” Reuters, 28 Sep. Available at: http://www.reuters.com/article/2012/09/28/us-apb-shareholders-idUSBRE88R05N20120928 (Accessed: 9 Oct 2012).• HEINEKEN (2012) Press releases. Available at:http://www.heinekeninternational.com/pressreleasespage.aspx (Accessed: 9 Oct 2012).• Marketwatch (2012) “Fraser & Neave holders approve Heinekens APB bid” Marketwatch -The Wall Street Journal, 28 Sep. Available at: http://www.marketwatch.com/story/fraser-neave-holders-approve-heinekens-apb-bid-2012-09-28 (Accessed: 10 Oct 2012).• Morton, A. (2012) “GLOBAL: Heinekens APB deal to pay for itself in five years – analyst” Just-drinks.com, 1 Oct. Available at: http://www.just-drinks.com/news/heinekens-apb-deal-to-pay-for-itself-in-five-years-analyst_id108301.aspx (Accessed: 10 Oct 2012).• Roland, L. (2012) “Heineken Toasts Asia With Deal To Acquire APB” The International BusinessTimes, 28 Sep. Available at: http://www.ibtimes.com/heineken-toasts-asia-deal-acquire-apb-797547 (Accessed: 10 Oct 2012).• Thompson, A. , Peteraf , M.A., Gamble, J.E., Strickland III, A.J. (2012) Crafting and ExecutiveStrategy – Concepts and Cases. 18th ed. MC Graw-Hill Irwin, New York.• Wassener, B. (2012) “Heineken Offers $4.1 Billion for Asia Pacific Breweries Stake” Dealbook– The New York Times, 20 Jul. Available at:http://dealbook.nytimes.com/2012/07/20/heineken-offers-4-1-billion-for-asia-pacific-breweries-stake/(Accessed: 10 Oct 2012).

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