Heineken NV, the world's third-largest brewer today offered to buy Singapore's Fraser & Neave Ltd's entire stake in Tiger beer maker Asia Pacific Breweries (APB) for $4.1 billion (S$5.1 billion), trumping a rival takeover attempt by Thai tycoon Charoen Sirivadhanabhakdi.

Heineken is offering S$50 ($40) a share for entire Fraser & Neave's stake in APB, topping a S$45-a-share offer from Thai Beverage and Kindest Place Group, companies linked to Sirivadhanabhakdi's family, for 8.6 per cent stake owned by Singapore's second-biggest bank, Oversea-Chinese Banking Corp (OCBC) and its insurance unit Great Eastern Holdings.

Heineken's offer is at a 45-per cent premium to the average price of APB shares in the past month.

The Amsterdam-based brewer said on successful closing of the deal, it would spend a further S$2.4 billion to buy out the minority shareholders in APB according to Singapore takeover rules.

Through its 50 per cent holding in Asia Pacific Investment Private Ltd, Singapore-based conglomerate Fraser & Neave holds a 64.8-per cent stake in APB. It also holds a direct 7.3 per cent stake in APB, while Heineken holds a 41.9 per cent stake in APB through a direct 9.5 per cent shareholding and an indirect shareholding of 32.4 per cent through a joint venture with Fraser & Neave.

Japan's Kirin Holdings also owns a 14.7 per cent stake in Fraser & Neave.

The battle for control of APG started on 18 July when OCBC revealed that it had signed an agreement with Thai Beverage and Kindest Place Group for selling its 22-per cent stake in Fraser & Neave and an 8.5-per cent stake in APB for a total sum of $3.03 billion (S$3.8 billion).

Heineken, which generates around half of its profits from emerging markets, quickly responded to take full control of beers brand like the iconic Tiger Beer, which is sold in 60 countries and other brands like Anchor, Bintang and Larue, all of which are very popular in Southeast Asia.

The Heineken brand is already being brewed under license by APB, which happens to be APB's largest brand representing 30 per cent of its volume.

Heineken said that if its proposal goes through, it would strengthen its platform for growth in some of the world's fast-growing economies and have direct access to important markets, including Cambodia, China, Indonesia, Malaysia, New Zealand, Papua New Guinea, Singapore, Thailand and Vietnam.

Heineken's offer is in line with the brewer's strategy to expand its presence in emerging markets and follows a series of acquisitions in recent years, including the purchase of the brewing operations of FEMSA in Mexico and Brazil, the partnership with United Breweries in India and acquisitions and capacity enhancement investments in Africa.

Commenting on the offer, François van Boxmeer, chairman and CEO of Heineken said, ''We really value our partnership with F&N which goes back over 80 years, but due to changes in the F&N and APB shareholding, the fabric of the partnership has changed. As a result, it is time for us to look ahead to the next chapter of our Asian business, in which Singapore will continue to be our regional headquarters and both the Heineken and Tiger brand will spearhead our brand portfolio in Asia.''

''We believe that our offer for the APB shares is highly attractive and provides excellent value to F&N and APB shareholders. At the same time, taking control of APB will create long-term financial and strategic value for Heineken's shareholders,'' he added.

Beer industry consolidation
The world's top five brewers control nearly 50 per cent of the global beer market, with Anheuser-Busch InBev,  the world's largest brewer, with an 18-per cent global market share, followed by SABMiller Plc with 9.8 per cent, Heineken with 8.8 per cent, Carlsberg with 5.6 per cent and Kirin Holdings Co. with 4.8 per cent.

Falling beer consumption in Western Europe and the US, has forced the brewing giants to shift focus to emerging countries for growth, and have recently spent billions of dollars in mergers and acquisitions in order to expand in enraging markets in South America, Asia and the CIS countries.

After reducing its massive $56.5-billion debt incurred from the Anheuser-Busch acquisition by selling non-core assets, Anheuser-Busch InBev has once again hit the acquisition trail.

In April, Anheuser-Busch, whose flagship brand is the Budweiser beer, acquired a 51-per cent stake in Dominican brewer Cervecería Nacional Dominicana SA (CND) from two sellers for $1.237 billion, and in June, it agreed to buy the remaining 50 per cent stake that it does not already own in Mexican Corona beer maker Grupo Modelo for $20.1 billion.

In the same month, Canadian-American beer giant, Molson Coors Brewing Company, struck a deal to buy Central and East European brewer StarBev LP, owned by Anheuser-Busch, for €2.65 billion ($3.54 billion), in order to strengthen its foothold in Europe's emerging markets.

Heineken NV paid around $7 billion in 2010 for Femsa Cerveza, Mexico's second-largest beer maker after Modelo, while SABMiller Plc, the world's second-biggest brewer, acquired Australia's Foster's Group last year for about $10.2 billion.

In May, Carlsberg said it is planning to make acquisitions in Asia, and will invest $670 million in a brewery in China, the world's biggest beer market.