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Kirin and Suntory, two of Japan’s largest food and beverage manufacturers, confirm merger talks
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Kirin and Suntory to potentially merge
Kirin Holdings Co., famous for its line of Japanese beers, and Suntory Holdings ltd., well-known for its whiskey, are reportedly in merger negotiations that could create Japan’s largest food and beverage manufacturer and a potential international powerhouse.
Media reports and press release confusion
One Monday, July 13th (Japanese Standard Time), reports started to spread among the Japanese media that the two companies are discussing mergers based on information from Suntory Holdings, ltd.,. Kirin Holdings Co. made a brief press release denying the rumors and standing only that the two companies were discussing increased operational collaborations.
However, today, July 14th, Kirin Holdings Co., in another brief press release, confirmed that the two companies are in fact in early negotiation stages, but that nothing further would be released until more decisions have been made.
Kirin and Suntory’s potential merger
If Kirin and Suntory merger, the newly combined food and beverage sector giant would put be on par with Kraft Foods and PepsiCo., and head of Anheuser-Busch and Coca-Cola, in regards to sales amounts according to a New York Times articles.
According to Japanese media reports, 2008 Kirin Holdings, a publicly traded company, reported revenues of 2.8 trillion yen. Suntory, a privately held company, reported 1.5 trillon yen in revenues. The combined revenue would have been more than 3.8 trillion yen, or around $41 billion US under current exchange rates. The combination would put the company strongly in first place within the Japanese food and beverage market.
International expansion efforts
Reasoning behind the potential merger is speculated to largely be for future international expansion efforts. Both companies are said to be aiming to spread their revenues outside of the limited Japanese food and beverage market. Both companies have reportedly been acquisitioning companies, mainly in the pacific region, over the past year or so under the current strength of the yen.
Any potential fears of a sudden Japanese food and beverage takeover internationally should be put to rest and remember that the majority of both companies’ revenues are still largely domestic.
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