February 27, 2021

DealBook: Kirin to Take Control of Brazilian Drinks Company

Kirin Holdings, the Japanese food and beverage maker best known for its beer, on Tuesday agreed to buy a controlling stake in a Brazilian beverages company, the latest example of how companies in maturing markets are seeking to expand in fast-growing economies.

Kirin said it had agreed to pay ¥198.8 billion, or $2.6 billion, for Aleadri-Schinni Participações e Representações, a company that owns 50.45 percent in Schincariol, one of the largest beer and soft drinks manufacturers in Brazil.

‘‘Through this share purchase, Kirin will obtain a solid operational platform in Brazil, the biggest economy in Latin America,’’ Kirin said in a statement.

The already sizeable beer and soft drinks market in Brazil promised to benefit from significant wealth and population growth in coming years, Kirin said.

Schincariol, well known in Brazil for its Nova Schin and Devassa beers, has 13 production facilities and a nationwide distribution system.

Kirin’s foray into Brazil follows a string of acquisitions by the company in the Asia-Pacific region as part of its drive to reduce its dependence on Japan, where anemic economic growth and an aging population make for a tough business environment.

In 2009, Kirin, whose portfolio also includes yogurt, health drinks and wine, bought stakes in the Australian brewer Lion Nathan and San Miguel Brewery of the Philippines, for a total of about $4 billion.

Last year, Kirin acquired a 14.7 percent stake in Fraser and Neave, a major player in the Singaporean and Malaysian drinks market, for ¥84.6 billion. And in January, Kirin announced a deal to establish a joint venture with China Resources Enterprise, the biggest beer maker in the country, to produce and distribute non-alcoholic beverages in China.

The expansion drive echoes the wider wave of mergers and acquisitions that has swept the global food and beverages sector in recent years, as slowing growth in mature markets, the growing popularity of other drinks like low-carbohydrate beers and rising input costs have put pressure on brewers to consolidate or buy market share, preferably in developing markets.

Last year, for example, Heineken of the Netherlands acquired Femsa of Mexico for $7 billion after outbidding SABMiller. And SABMiller, the brewing giant behind beers like Peroni and Grolsch, in June offered about $10 billion for Foster’s of Australia. Foster’s rejected that bid as too low but has not ruled out talking to the company.

Japanese companies — not just in the drinks sector — have been especially eager to expand overseas. They have been helped in this by the strong Japanese yen, which has increased their financial firepower abroad.

So far this year, Japanese companies have staged 361 overseas acquisitions, for a total of $46.7 billion, which is more than twice the amount during the same period in 2010, according to data from Dealogic.

By far the largest overseas acquisition by a Japanese company in several years was the $13.6 billion purchase by Takeda Pharmaceutical, the largest Japanese drug maker, of Nycomed, a privately held Swiss company with large exposure to emerging markets. That deal was announced in May.

Article source: http://feeds.nytimes.com/click.phdo?i=d9b1d3f3b29dda50082f2321f8bfe163

Speak Your Mind