Japanese brewer Kirin confirms intent to buy majority stake in Kyowa Hakko

Following speculation and rumor ahead of the weekend, Kirin Holdings, the parent of Japanese beer giant Kirin Brewery, confirmed at a Tokyo press conference on October 22 that it plans to acquire 50.1% of Kyowa Hakko Kogyo through a takeover bid and a stock swap between the latter and Kirin Pharma, the brewer's pharmaceutical subsidiary.

Although financial terms of the deal were not disclosed, pre-confirmation speculation valued the transaction at around 300.0 billion yen ($2.55 billion).

Assuming the acquisition succeeds, Kirin plans to integrate its pharmaceutical division into Kyowa Hakko to form a single entity called Kyowa Hakko Kirin. After Kirin acquires a majority share, Kyowa Hakko will make Kirin Pharma a wholly-owned subsidiary, effective April 2008 and will integrate Kirin Pharma into Kyowa Hakko Kirin in October next year. Kirin will maintain its ratio of stock in the new company at 50.1% for 10 years. Yuzuru Matsuda, president of Kyowa Hakko Kogyo, will be in this post in the new company, the head office of which will remain at the current location.