Thai Beverage Public Co, the Thailand-based spirits and beer maker has bought a 75% stake in Myanmar Distillery Company (MDC) for US$1bn.
Myanmar Distillery Company is Myanmar’s largest spirits company and the producer of Grand Royal, the country’s leading whisky brand. It also produces a variety of other whiskeys and gins at its two blending and bottling facilities in Yangon and Mandalay.
Through the deal, ThaiBev is hoping to tap into the country's burgeoning spirits market.
ThaiBev acquired the 75% stake in Myanmar Distillery Company and its supply chain from four third-party vendors, including Texas-based private equity firm TPG which sold its 50% stake in Myanmar Distillery Company.
TPG partner Ganen Sarvananthan said: “The investment from Thai Beverage, one of Asia’s leading spirits groups, is a testament to MDC’s extensive platform and strong management team. We wish them continued success as they secure further opportunities with their new partners.”
The deal will give Singapore-listed ThaiBev access to an expanded distribution network in Myanmar, as the company looks overseas for growth following a recent sales dip.
In the first nine months of its fiscal year, until June 2017, ThaiBev reported a drop in sales of 6% year-on-year to US$4.3bn. This was a result of slow economic growth and the observance of a national mourning period in Thailand, said the company.
It is predicted that Myanmar’s beer market will almost double in value from US$375mn in 2015 to US$675mn by 2018, according to analyst Euromonitor.
ThaiBev is Thailand's largest and one of Southeast Asia’s largest beverage companies with brands including Chang beer, Archa beer as well as SangSom Special rum.
Earlier this month, ThaiBev executives said that the company planned to launch two new spirit products in November and that mergers and acquisitions in key markets such as Vietnam, Cambodia and Myanmar were needed.
Thai Bev already controls 90% of the drinks market in Thailand and the purchase of Myanmar distillery company will give the company access to Myanmar;s growing wine, beer and spirits market as well as its distribution and supply chain.
It is thought that the acquisition will help ThaiBev take a step closer towards its goal of becoming the largest beverage company in Southeast Asia by 2020.
The deal follows from ThaiBev’s acquisition of Singaporean beverage producer Fraser and Neave for US$11.2bn in 2013.