TOKYO (AP) — A clash over control has scuttled plans for Japanese beermaker Kirin Holdings Co. and smaller rival Suntory Holdings Ltd. to create one of the world's largest food and beverage companies.
Despite seven months of negotiations, the two companies said Monday could not agree on an acquisition ratio, which would've determined control of the new entity.
Suntory's founding family owns about 90 percent of the privately held company and would have likely become the new entity's largest shareholder with a one-third stake.
The combined entity would have given Japan its first brewery capable of competing globally with the likes of Anheuser-Busch InBev NV. Kirin and Suntory posted combined sales of beer, soft drinks and foods of about $42.5 billion last year — higher than AB Inbev N.V. or Coca-Cola Co.
Kirin insisted that the new company must be public to ensure "management independence and transparency."
Suntory had a different view and even if talks had continued they were unlikely to result in the establishment of a company that would fulfill 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.
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.
The news talks had broken down disappointed investors, who sent Kirin shares tumbling on the Tokyo Stock Exchange. The issue was down 7.8 percent at 1,331 yen in afternoon trading.
Tokyo-based Kirin, Japan's largest food and beverage company, is best known domestically as a beer and soft drink producer.
Suntory headquarters are in Osaka, western Japan. It is well known for its beer and whiskey, which was the subject of one of the most memorable lines in the 2003 hit film "Lost in Translation."
In the movie, an aging actor played by Bill Murray travels to Tokyo to shoot a whiskey commercial. While gazing into the camera, he must master the phrase: "For relaxing times, make it Suntory time."
Both companies have been eager to boost their international operations as Japan's population ages and shrinks. Kirin last year bought full control of major Australian brewer Lion Nathan Ltd. and nearly half of San Miguel Brewery Inc. of the Philippines.
Meanwhile, Suntory last month agreed to buy a 70 percent share in Shanghai-based ASC Fine Wines Holding Ltd., a major importer and distributor of foreign wines in China. The deal follows Suntory's purchase in November of European drink maker Orangina from private equity firms Blackstone and Lion Capital.
