Clash over control ends food giant plans
By Tomoko Hosaka |
February 9, 2010, Tuesday
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Print Edition
Print Edition
A CLASH over control has scuttled plans for Japanese beer maker Kirin Holdings Co and smaller rival Suntory Holdings Ltd to create one of the world's largest food and beverage companies.
Despite seven months of negotiations, the two companies said yesterday that they could not agree on an acquisition ratio, which would have determined control of the new entity.
Suntory's founding family owns about 90 percent of the privately held company and would have likely become the new entity's largest shareholder with a one-third stake.
The combined entity would have given Japan its first brewery capable of competing globally with the likes of Anheuser-Busch InBev NV. Kirin and Suntory posted combined sales of beer, soft drinks and foods of about US$42.5 billion last year - higher than AB Inbev NV or Coca-Cola Co.
Kirin insisted that the new company must be public to ensure "management independence and transparency."
Suntory had a different view and even if talks had continued they were unlikely to result in the establishment of a company that would fulfil Kirin's aim of developing as a leading global company, the brewer said in a statement.
Suntory blamed disagreement over the ratio, along with other details, for the breakdown in talks.
When news of talks between the two companies emerged last July, analysts praised the proposed union as a smart move to accelerate overseas expansion and offset a contracting Japanese market.
The news talks had broken down disappointed investors, who sent Kirin shares tumbling on the Tokyo Stock Exchange. The issue was down 7.8 percent at 1,331 yen (US$14.89) in afternoon trading.
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