Heineken: the battle for Asia Pacific Breweries

• Publication date: August 2012
• Report size: 21 pages

Introduction Asia Pacific Breweries is Heineken’s joint venture in Singapore, with a variety of brands and consumer beverages that enjoy prominence in their local markets. The venture is crucial to the firm's growth strategy. This has been compromised following a competitor acquiring shares in the partner firm. Heineken considers this a threat, and wants to gain full control of the venture. Scope of this research Mark...

Introduction
Asia Pacific Breweries is Heineken’s joint venture in Singapore, with a variety of brands and consumer beverages that enjoy prominence in their local markets. The venture is crucial to the firm's growth strategy. This has been compromised following a competitor acquiring shares in the partner firm. Heineken considers this a threat, and wants to gain full control of the venture.

Scope of this research
MarketLine Case Studies describe topics such as innovative products, business models, and significant company acquisitions. Fact-based and presented in an accessible style, they explain the rationale of commercial decisions and illustrate wider market and economic trends. Research and analysis Highlights
Heineken is the world's third largest beer producer, behind Anheuser-Busch InBev and SABMiller.

Asia Pacific Breweries' growth saw a compound annual growth rate of 13.4% from 2007 to 2011 as revenues jumped from S$1.78bn ($1.42bn) to S$2.97bn ($2.37bn). Net income went from S$263.1m ($209m) to S$341.7m ($271.9m), a 29.9% increase.

Asia Pacific remains an untapped market for the big three brewers, contributing to earnings before interest and tax by approximately 2% for Anheuser-Busch InBev and SABMiller, and 7% for Heineken.

Key reasons to purchase this research
Why has Heineken moved to fully control Asia Pacific Breweries? What are the implications of the deal for the Asia Pacific region?

Beer Industry in Singapore

TABLE OF CONTENTS
Overview 2
Catalyst 2
Summary 2
Analysis 6
Heineken and Asia Pacific Breweries 6
Heineken is one of the largest brewing companies in the world 6
Asia Pacific Breweries is a prominent Heineken joint venture 8
F&N: the other partner in APB 10
Heineken's growth strategy 11
Advancing brands is central to growth 11
Access to emerging markets is a key objective 12
Heineken's activities in Asia Pacific could secure future dividends 14
ThaiBev's interest has sparked a battle for APB's control 15
APB's success has attracted interest within the region 15
The deal has regional implications 16
Conclusions 17
Heineken must win control of APB to secure its position 17
Appendix 18
Definitions 18
Sources 18
Further reading 19
Ask the analyst 20
About MarketLine 20
Disclaimer 20



TABLE OF FIGURES
Figure 1: Global beer market share, by volume (%), 2010 7
Figure 2: APB's revenues (S$), 2007–11 8
Figure 3: Tiger beer, one of APB's most successful products 9
Figure 4: Heineken's sponsorship of the UEFA Champions League 11


LIST OF TABLES
Table 1: Heineken's revenues and net income, 2006–11 6
Table 2: Global beer market share, by volume (%), 2010 7

Beer in Singapore

Singapore Beer Sales, Us$mn

• $ 250
• Industry data
• January 2013

Yearly, From 2002 To 2017
By Business Monitor International
Source: Statistics Singapore, Company information, Trade press, BMI/BMI calculation

• Industries : Beer
• Countries : Singapore

Singapore Beer Sales, Mn Litres

• $ 250
• Industry data
• January 2013

Yearly, From 2002 To 2017
By Business Monitor International
Source: Statistics Singapore, Company information, Trade press, BMI

• Industries : Beer
• Countries : Singapore

Singapore Beer Sales, Sgdmn

• $ 250
• Industry data
• January 2013

Yearly, From 2002 To 2017
By Business Monitor International
Source: Statistics Singapore, Company information, Trade press, BMI

• Industries : Beer
• Countries : Singapore

Singapore Beer Sales, Sgd, % Change Y-o-y

• $ 250
• Industry data
• January 2013

Yearly, From 2003 To 2017
By Business Monitor International
Source: Statistics Singapore, Company information, Trade press, BMI/BMI calculation

• Industries : Beer
• Countries : Singapore

Singapore Beer Sales, Sgd Per Capita

• $ 250
• Industry data
• January 2013

Yearly, From 2002 To 2017
By Business Monitor International
Source: Statistics Singapore, Company information, Trade press, BMI/BMI calculation

• Industries : Beer
• Countries : Singapore