Title

Heineken's acquisition of Asia Pacific breweries: Accounting for business combinations and ownership interests

Publication Type

Journal Article

Publication Date

11-2017

Abstract

On July 20, 2012, Heineken, a Dutch brewery offered S$5.125 billion (Singapore dollars; approximately US$4.1 billion) to buy Asia Pacific Breweries Ltd (APB; formerly, Malayan Breweries Limited) from its Singapore-based joint venture partner, Fraser and Neave, Limited. (F&N). At that point, Heineken and F&N had joint control over APB through the joint venture vehicle Asia Pacific Investments Pte Ltd (APIPL). Brewery business under the joint arrangement had moved on quite predictably from the time APB was formed in 1931. However, the calm changed to high drama when Thai Beverage, owned by one of Thailand's tycoons, made a bid for F&N and APB. Heineken was quick to respond by aggressively buying shares of APB, leading to a large control premium being paid in the final offer price. The bidding war was largely motivated by the Dutch and Thai beer giants, each wanting to own the iconic Tiger beer brand that was owned by APB and thus take control of APB's strong market share in the fast-growing market of Asia. The Heineken bid for APB presents an interesting case study regarding the motivations for acquisitions, the nature of control, and accounting for acquisitions. The case also presents rich issues in accounting for changes in ownership interests with and without gain of control.

Keywords

Business Combinations, Goodwill, Control, Change in Ownership Interests, International Financial Reporting Standards (IFRS), IFRS 3

Discipline

Accounting | Asian Studies | Corporate Finance

Research Areas

Corporate Reporting and Disclosure

Publication

Issues in Accounting Education

Volume

32

Issue

4

First Page

101

Last Page

127

ISSN

0739-3172

Identifier

10.2308/iace-51845

Publisher

American Accounting Association

Embargo Period

4-4-2018

Additional URL

https://doi.org/10.2308/iace-51845

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