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F&N to sell Myanmar Brewery stake for S$775m after dispute

SINGAPORE — After a two-year dispute, the bitter battle over a 55-per-cent stake held by Fraser & Neave in Myanmar’s leading beermaker has finally ended, with F&N and its joint venture partner agreeing to complete the sale at US$560 million (S$775 million), more than double the price Myanmar Economic Holdings Ltd (MEHL) had initially offered.

F&N is exploring other ways to access Myanmar’s beer drinkers after the sale, as ‘it’s a very good market’. Photo: Reuters

F&N is exploring other ways to access Myanmar’s beer drinkers after the sale, as ‘it’s a very good market’. Photo: Reuters

SINGAPORE — After a two-year dispute, the bitter battle over a 55-per-cent stake held by Fraser & Neave in Myanmar’s leading beermaker has finally ended, with F&N and its joint venture partner agreeing to complete the sale at US$560 million (S$775 million), more than double the price Myanmar Economic Holdings Ltd (MEHL) had initially offered.

Government-backed MEHL won an arbitration case against F&N last year entitling it to buy the latter’s stake in Myanmar Brewery and take full control of the brewer. But the pair disagreed on the currency exchange rate at which the transaction should be made.

MEHL had sought to compel F&N to sell the stake in Myanmar Brewery for US$246 million, while an independent valuer estimated on July 22 that it was worth US$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 yesterday. The deal will be completed on or before Aug 20 when the amount is paid, said MEHL in a statement.

Myanmar’s emergence from economic isolation in 2012 has drawn consumer companies from Heineken to Coca-Cola, keen to access its estimated 54 million consumers. Heineken and Carlsberg have both opened breweries in the ASEAN country, where beer sales are forecast by Euromonitor to reach US$675 million by 2018. F&N shares closed 1.8 per cent higher at S$2.30.

Myanmar Brewery, the Yangon-based maker of Myanmar Double Strong and Andaman Gold beer, was set up in 1995 by MEHL and Heineken subsidiary Asia Pacific Breweries, the latter of which sold its 55 per cent stake to F&N in 1997. F&N was taken over in 2013 by Thai Beverage, controlled by Thai billionaire Charoen Sirivadhanabhakdi, and another Chareon firm.

MEHL, a Myanmar army-linked organisation, in late 2013 claimed a right under a joint venture agreement to buy out F&N’s stake saying F&N had defaulted on a term in the agreement.

An arbitral tribunal had ruled in October 2014 that MEHL’s offer did not 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.

Following the latest agreement, MEHL will withdraw a case filed at the Singapore High Court regarding the payment amount and deadline, F&N said in a statement. AGENCIES

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