Kirin Offers to Buy Australia’s Lion Nathan as Japan Sales Fall

(Bloomberg) -- Kirin Holdings Co., Japan’s largest beverage maker, offered to buy the 54 percent of Lion Nathan Ltd. it doesn’t already own, accelerating its push into Australia to counter falling beer sales at home.

The brewer of Kirin beer hasn’t decided how much to pay for the stake, valued at A$2.4 billion ($1.7 billion) at yesterday’s closing price, spokesman Makoto Ando said in Tokyo. Sydney-based Lion Nathan, Australia’s second-largest brewer, will consider the “non-binding” offer, it said in a statement.

The Japanese company, which already owns Australia’s largest milk processor and juicemaker, has boosted international expansion as a declining birthrate reduces potential customers at home and a stronger yen makes foreign acquisitions cheaper. The offer comes two months after Lion Nathan scrapped a A$7.3 billion bid, backed by Kirin, for Coca-Cola Amatil Ltd.

“Kirin has obviously taken a shine to Australian assets and decided to take advantage of the strength in the yen,” said Sean Fenton, who manages about $324 million at Tribeca Investment Partners in Sydney. The Japanese currency has climbed 42 percent against the Australian dollar during the past year.

Kirin shares rose 0.8 percent to 1,087 yen in Tokyo trading as of 10:08 a.m. in Tokyo, paring their decline this year to 7.7 percent. Lion Nathan, which was halted from trade on Australia’s stock exchange before the market opened, closed yesterday at A$8.31, giving the company a market value of A$4.4 billion.

Overseas Acquisitions

Gaining full ownership of Lion Nathan would help Kirin President Kazuyasu Kato meet his goal of doubling the proportion of overseas sales by 2015.

The Japanese brewer said in August it planned to spend 300 billion yen ($3.1 billion) on acquisitions to maintain growth. It aims to increase its percentage of overseas sales to 30 percent by 2015 from 18 percent in 2006.

Since then it’s acquired Australian milk processor Dairy Farmers for A$675 million and announced a plan to acquire 43 percent stake in San Miguel Corp.’s Philippine beer for 58.9 billion pesos ($1.21 billion).

In 2007, Kirin acquired Australian dairy and fruit juice maker National Foods from San Miguel in a deal valued at 294 billion yen.

Kirin first acquired a 45 percent stake in Lion Nathan, then based in New Zealand, in 1998 for NZ$1.33 billion ($736 million).

Lion Nathan expects net income between A$300 million and A$315 million in the 12 months ending Sept. 30, boosted by last year’s purchase of brewer J. Boag & Son. Ltd.

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