F&N

F&N: there has been recent news flow on M&A in the global F&B space, particularly by the Japanese giants.

This morning, Kirin announced that spent 3.95b reais (US$2.5b) to buy Brazil’s Aleadri-Schinni, which holds 50.45% of Schincariol, a beer and soft drink co. And last month, Suntory said it will invest ¥10b (US$126m) to tie up with Indonesia’s Garudafood to form a beverage JV, as well as buy a 34% stake in Garudafood’s exclusive sales and distribution arm. Garudafood is Indonesia’s largest snack producer with 25% mkt share.

Kirin acquired a 15% stake in FNN back in Jul 2010, which could portend a change to FNN’s current conglomerate structure (currently 64% property, 34% F&B, and others). If the long overdue restructuring takes place, this could be a major catalyst for the stock’s rerating, due to potential monetization of FNN’s commercial property and sale of other assets such as printing & publishing.

Last wk, HSBC recommended FNN (Overweight, TP $7.16) as its preferred pick in the Consumer space.