Kirin seeks to acquire Fancl to diversify amid weak beer market

(Source: Fancl / Facebook)

Alcoholic beverage company Kirin Holdings is seeking to fully acquire skincare and dietary supplements retailer Fancl in an effort to diversify amid a weak beer market.

Kirin currently holds a 33 per cent stake in Fancl and intends to acquire the remaining shares, expectedly for 119.9 billion yen (US$1.3 billion), Nikkei Asia reported.

The offer is expected to represent about a 30 per cent premium to the shares’ price. Kirin first acquired a one-third stake in Fancl for 130 billion yen in 2019.

Kirin’s alcoholic business accounts for the majority of the company’s profit. Last year, the business contributed a profit of 119.9 billion yen to Kirin while its health science division booked a loss of 12.5 billion yen.

Kirin hopes that acquiring Fancl will improve earnings for its health science segment and develop a worldwide market for the products.

Nikkei Asia pointed out that the health market is growing, as people become more health conscious since the Covid-19 pandemic and that the middle class in emerging countries has been expanding.

Last August, Kirin acquired Australian supplements brand Blackmores for about 170 billion yen.

The report noted that beer sales in Japan alone have declined 23 per cent over the past decade. Globally, beer sales have been weaker and are not expected to return to previous levels amid a growing health-conscious population.

The Australian Financial Review earlier reported that Kirin’ subsidiary Lion intends to close the Malt Shovel Brewery in inner Sydney in August, after 36 years of operations, due to high costs.

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