May 24, 2019
Singapore Sports Drink Maker F&N Jumps on Thai Starbucks Deal
Bloomberg News
,(Bloomberg) -- Shares of Fraser and Neave Ltd. got a jolt of caffeine after the company, controlled by Thailand’s richest man, announced plans to enter the Thai coffee market.
F&N, better known for its 100Plus isotonic sports drink, jumped the most in 10 months after saying its joint venture unit would buy out Starbucks Corp.’s operations in Thailand. The deal --- that people with knowledge of the matter said could value Starbucks’ operations there at more than $500 million -- sparked an early rally of as much 5.2% in F&N’s shares.
“Starbucks is an iconic brand, which will prosper in the burgeoning Thai consumer market,” Nirgunan Tiruchelvam, head of consumer-sector equity research at Exotix Partners, said by telephone on Friday. Thai Beverage PCL, which owns 28.5% of Singapore-based F&N, will become a “regional consumer powerhouse with Starbucks, KFC, Chang beer and Thai spirits under its belt,” he said.
F&N said the venture will bolster its presence in Southeast Asia and is expected to contribute to earnings in the current financial year ending September.
F&N, which also sells Magnolia milk, Fruit Tree juice drinks and King’s ice cream, generated about 40% of its annual revenue in Malaysia, more than a third from Thailand and about a quarter from Singapore, according to the data provided by the company. Its shares pared earlier gains and was trading 2.9% higher as of 2:16 p.m. in Singapore.
To contact the reporters on this story: Abhishek Vishnoi in Singapore at avishnoi4@bloomberg.net;Revathi Valluvar in Singapore at rvalluvar@bloomberg.net
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Joyce Koh, Shamim Adam
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