Kirin’s talks with The Coca-Cola Company of Atlanta, about acquiring Australian bottler Coca-Cola Amatil, were finally abandoned in February 2009.
The A$7.7bn ($4.9bn) cash and shares offer was made in November by Lion Nathan, the biggest brewer in New Zealand and second biggest in Australia. But the negotiations were conducted between Kirin, which owns 46% of Lion Nathan, and Coca-Cola, which is CCA’s biggest shareholder with a stake of 30%.
Kirin is keen to expand abroad to compensate for the declining beer market in Japan. As well as controlling Lion Nathan, Kirin also owns Australia’s largest dairy business, National Foods, which includes leading juice maker Berri. In August 2008, National Foods expanded by buying its smaller rival, Dairy Farmers, for A$910m ($580m).
Lion Nathan’s bid for CCA was dismissed by Terry Davis, MD of the bottler, as being “at least A$1bn” too low. However, it seems the reason talks between Kirin and Coke ultimately reached an impasse may have been more complicated.
According to insiders, Kirin was willing to sell Coca-Cola the Berri juice business, which competes with CCA. It was also prepared to let Coke have CCA’s top-selling Mount Franklin water brand, and to relinquish CCA’s bottling franchise in the big Indonesian market.
But Kirin insisted that its acquisition must include all CCA shares, and Coke was equally insistent that it should retain a substantial stake in the company, which is one of its most important regional ‘anchor’ bottlers.
While Kirin was said to be “disappointed” by its failure to buy CCA, the Japanese group was able to drown its sorrows less than two weeks later by buying a 43.3% stake in San Miguel Brewery, the Philippines’ biggest beer producer.
Kirin is paying PHP 58.9bn ($1.22bn) for its shares in the brewery, while selling its 19.9% stake in the brewer’s parent, the food and beverage conglomerate San Miguel Corp. The SMC shares are being bought by local investment firm Q-Tech Alliance Holdings for PHP 39.6bn ($821m) – a deal that will involve Kirin booking a ¥26bn ($276m) charge.
SMC, which now owns 51% of the San Miguel Brewery, plans to diversify into industries such as oil refining, power generation, water supply and telecoms. There is speculation that Kirin will ultimately buy all remaining shares in the brewery.
Meanwhile, the future of Schweppes Australia, the country’s second largest soft drinks business after CCA, remained in the balance. In December, British confectionery giant Cadbury agreed to sell Schweppes Australia to Kirin’s Japanese rival Asahi for £550m ($784m). However, The Coca-Cola Company had until March 2009 to make an alternative offer under a pact signed 10 years ago, when Coke’s previous attempt to buy Schweppes Australia was blocked by competition regulators.
© FoodBev Media Ltd 2024