Despite seven months of negotiations, the two companies failed to agree on an acquisition ratio, necessary to determine control of the new entity.
The combined entity would have given Japan its first brewery capable of competing globally with the likes of Anheuser-Busch InBev. Kirin and Suntory posted combined sales of beer, soft drinks and foods of about $42.5 billion last year – higher than AB Inbev or The Coca-Cola Company.
Kirin insisted that the new company must be public to ensure “management independence and transparency.” But 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. Suntory’s founding family owns about 90% of the privately held company and would probably have become the new entity’s largest shareholder with a one-third stake.
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.
© FoodBev Media Ltd 2019
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