Thai Beverage (ThaiBev), led by billionaire Charoen Sirivadhanabhakdi, will exit its real estate business by transferring its 28.78% stake in Frasers Property to TCC Assets via a share swap. InterBev Investment, ThaiBev's unit, will exchange its Frasers Property-stake for a 41.30% shareholding in Fraser and Neave. Valued at SGD 2.14 billion, the swap prices Frasers Property shares at SGD 1.89 and Fraser and Neave shares at SGD 3.55. ThaiBev will focus on non-alcoholic beverages, while Fraser and Neave aims to enhance its beverage and food brands in Southeast Asia. Shares of both companies rose following the announcement.
Thai Beverage (ThaiBev), controlled by Thai billionaire Charoen Sirivadhanabhakdi, has announced its decision to exit the real estate business. This strategic move involves transferring its entire 28.78% stake in Singapore-based Frasers Property to Thailand-based TCC Assets. This transfer will be executed through a share swap agreement, as revealed in an exchange filing last week.
ThaiBev's unit, InterBev Investment, will handle the transfer of the Frasers Property stake to TCC Assets. In return, TCC Assets will transfer a 41.30% shareholding in the conglomerate Fraser and Neave to InterBev. The share swap involves shares valued at SGD 2.14 billion (USD 1.60 billion), based on Reuters calculations. This valuation prices Frasers Property shares at SGD 1.89 apiece and Fraser and Neave shares at SGD 3.55 each.
In a statement, ThaiBev articulated its rationale for this move, emphasizing its strategy to streamline its business focus towards becoming a pure-play beverage and food company. By exiting the property business and increasing its exposure to non-alcoholic beverages and dairy products, ThaiBev aims to align itself more closely with pure-play beverage and food peers, potentially resulting in a favorable re-rating of the company's market valuation.
This strategic shift underscores ThaiBev's commitment to enhancing its presence in the non-alcoholic beverage segment. The company sees significant growth potential in this area, particularly in Southeast Asia, where consumer demand for health-conscious beverage options is on the rise. By concentrating on its core competencies in beverages and food, ThaiBev anticipates improved operational efficiencies and stronger market positioning.
Fraser and Neave, the conglomerate that will receive increased investment from ThaiBev through this share swap, also stands to benefit from the deal. Fraser and Neave is focused on bolstering its beverage and food brands across Southeast Asia. The additional investment from InterBev is expected to support Fraser and Neave's growth initiatives and market expansion strategies, further solidifying its footprint in the region.
Market reactions to the announcement were positive. Shares of Fraser and Neave experienced a significant gain of 16.8%, rising to SGD 1.25. Similarly, shares of Frasers Property climbed 3.8%, reaching SGD 0.83. Shares of ThaiBev were temporarily halted from trading, likely in anticipation of the formalization of the share swap agreement.
This move marks a significant step in ThaiBev's strategic transformation, as it refocuses its business portfolio on the lucrative and growing non-alcoholic beverage market. By divesting from real estate, ThaiBev can concentrate its resources and efforts on expanding its beverage and food segments, positioning itself for long-term growth and success in these core areas. The transaction with TCC Assets and the subsequent realignment of investments highlight the company's proactive approach to adapting to market trends and consumer preferences.
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