Thai billionaire Charoen builds empire with F&N takeover

For self-made Thai billionaire Charoen Sirivadhanabhakdi, the takeover of Singapore's Fraser and Neave Ltd (F&N) will add legions of assets to his drinks and real estate empire that already stretches from Southeast Asia to the United States.

Charoen, the son of a Bangkok street vendor whom Forbes ranks as Thailand's third-richest person with a net worth of $6.2 billion, is no stranger to a challenge.

He lost to Heineken NV last year in a battle for F&N's stake in Asia Pacific Breweries Ltd , the maker of Tiger beer, but forced the Dutch giant into a higher offer that made him a tidy gain on shares his group had amassed.

This week, Charoen emerged victorious when a consortium led by Indonesian tycoon Stephen Riady pulled out of the bidding for F&N's soft drinks, dairy and publishing businesses plus a real estate portfolio worth more than S$8 billion ($6.5 billion).

"He was ecstatic," said a person involved in the takeover who met Charoen just after his rival withdrew.

The $11.2 billion deal, Southeast Asia's biggest takeover, adds popular brands and distribution networks to Charoen's Thai Beverage PCL that brews Chang (Elephant) beer and makes spirits, energy drinks and instant coffee.

F&N is the leader in Singapore and Malaysia's soft drinks markets, according to Euromonitor, and it has a 55 percent stake in Myanmar Brewery Ltd, a joint venture that produces the rapidly emerging country's best-selling beer.

Charoen, 69, is also heavily into property. His privately held TCC Land owns shopping malls and hotels, including the Hotel Plaza Athenee in New York, and he has substantial assets in Singapore's booming real estate market.

In 2007, the Straits Times newspaper reported he bought 47 of the 48 units in a luxury Singapore condominium a day before a private preview sale. He would have bought the whole thing, it said, if local laws did not prevent a foreigner from owning all of the units in a single development.

The F&N acquisition fits the pattern of expanding Charoen's drinks business and is also a chance for his son, who heads Thai Beverage, to cut his teeth with a big international deal.

Thapana Sirivadhanabhakdi, the third of the billionaire's five children, was named president and chief executive of Thailand's top beer and spirits group in 2008.

As patriarch, Charoen has kept the business in the family in other ways. He is chairman of venerable Thai trading firm Berli Jucker , but son-in-law Aswin Techajaroenvikul leads it as it embarks on major expansion plans in the region.

FAMILY BUSINESS

Starting in the trading business, Charoen and his family expanded aggressively in the liquor, sugar milling, banking and insurance fields during the 1980s and early 1990s.

Charoen entered the Thai beer market in 1995 by setting up a joint venture with Danish brewer Carlsberg to produce Chang. He later formed Beer Thai Co to manage marketing and distribution.

Asia's financial crisis of 1997/98, which led to the closure of financial institutions owned by his family, forced Charoen to leave Thailand and stay overseas for a while.

His fortunes changed after the firm intensified a battle for Chang's market share in 1999 by cutting its wholesale prices and gained ground on rival Singha Corp, which has been selling Thailand's best-known beer Singha (Lion) since 1933.

Beer Thai was later restructured and became part of Thai Beverage before listing in Singapore in 2006 as it faced opposition from monks and anti-alcohol activists at home. Since 2009, the beer business has made losses due to tax burdens and Chang's loss of market share.

Thai Beverage bought nearly 65 percent of Serm Suk PCL , the local bottler of Pepsi, in 2011 to expand its soft drinks business. In 2008, it took over Thai green tea and sushi maker Oishi Group for $214 million.

Charoen has also ventured beyond drinks and real estate.

In 2004, he expressed interest in buying a stake in English soccer giants Liverpool FC with then Thai Prime Minister Thaksin Shinawatra as a potential partner in a 25 percent share.

The agreement fell through but Charoen stayed close to English soccer by winning a deal to advertise Chang on the shirts of Everton, Liverpool's biggest rivals.

($1 = 1.2283 Singapore dollars)

(Writing by John O'Callaghan; Additional reporting by Saeed Azhar in SINGAPORE; Editing by Ryan Woo)