Thailand: ThaiBev considering IPO of its brewery business

Thai Beverage Pcl is considering an initial public offering of its brewery business, in what could be the biggest listing in Singapore in close to a decade. Shares of the company surged, Yahoo Finance reported on November 29.

The drinks maker is speaking with potential advisers about listing the brewery unit next year and may seek a valuation of as much as $10 billion, according to people with knowledge of the matter. A deal could include its beer assets in Thailand and Vietnam, one of the people said, asking not to be identified because the information is private.

ThaiBev, controlled by Thailand’s richest man, confirmed it’s weighing an IPO, without disclosing details like valuation or listing venue. Shares of ThaiBev rose as much as 5.2% in Singapore trading, the most in more than three months.

The IPO is likely to be the Singapore bourse’s biggest since the 2011 listing of Hutchison Port Holdings Trust, which raised $5.5 billion. At a valuation of $10 billion, the unit will also rank among the region’s biggest beer companies, roughly on par with China’s Tsingtao Brewery Co. It would still be far smaller than Anheuser-Busch InBev’s Asian unit, which raised $5 billion in a Hong Kong share sale in September that ranks as the world’s fourth-biggest IPO this year.

ThaiBev is best known for producing Chang, a lager whose green bottles are adorned with an image of two elephants. It also brews Archa beer and the German-inspired Federbrau brand. In 2017, ThaiBev’s Vietnamese affiliate agreed to buy a controlling stake in Sabeco, the country’s largest brewer, for about $4.8 billion.

Although growth in beer consumption is flat or declining across mature markets like the U.S., Japan and China, Southeast Asia is one of the industry’s bright spots. An expanding middle class and youthful population drove a 300% surge in beer demand in Vietnam between 2002 and 2017, according to data from Euromonitor International.

Shares of ThaiBev have risen 43% in Singapore trading this year through Thursday, November 28, giving the company a market value of about $16 billion. No final decisions have been made, and there’s no certainty the deliberations will lead to a transaction, the people said.

ThaiBev said in a statement on November 29 it is evaluating strategic proposals including a potential listing of the beer business, in consultation with external advisers.

Apart from the brewery business, ThaiBev runs distilleries that produce liquor including SongSam rum, Meridian brandy and Drummer whisky. It owns about 28.5% of Singapore’s Fraser & Neave Ltd., which sells 100Plus soft drinks and Magnolia dairy products, data compiled by Bloomberg show.

The group is controlled by Charoen Sirivadhanabhakdi, who is Thailand’s richest person with a net worth of about $19.5 billion, according to the Bloomberg Billionaires Index.

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