Japan's Kirin to buy out Australian brewer Lion Nathan

Lion Nathan Ltd, the Australian brewer of Tooheys and Hahn beers, said on Monday that its biggest shareholder, Japan's Kirin Holdings Co, has agreed to buy the 54 per cent of Lion it does not already own.

The offer values Lion Nathan at an equity value of $6.5 billion and an enterprise value of $8.5 billion. Nathan's independent board will recommend that Nathan's non-Kirin shareholders vote for the acquisition subject to finalisation of the satisfactory scheme of arrangement, the company said in a release.

Under the deal, Tokyo-based Kirin will buy the shares at A$12.22 ($8.76) each, made up of $11.50 in cash and another 72 cents in dividends, the Sydney-based Lion Nathan said in a statement. The offer represents a premium of 47.1 per cent to Lion's closing price on the Australian Stock Exchange of $8.31  on Wednesday, 22 April.

The offer values Lion Nathan at A$6.5 billion ($4.7 billion) on an equity basis, and A$8.2 billion on an enterprise basis, Lion Nathan said.

"We believe this is a very attractive outcome for Lion Nathan's non-Kirin shareholders," Lion Nathan chairman Geoff Ricketts said in the statement. "It is a compelling offer at a significant premium to Lion Nathan's share price."

The cash consideration of A$12.22 per share comprises scheme cash consideration of A$11.50 per share and a fully franked cash payment of A$0.72 by Lion Nathan. The non-Kirin directors of Sydney-based Lion Nathan unanimously supported the deal subject to a report that it is in the best interests of shareholders and there is not a higher offer.

The offer is intended to be effected by way of a scheme of arrangement and is subject to non-Kirin shareholder approval and other approvals.
 
On 24 April, Lion Nathan reported net profit after tax of A$176 million on net sales revenue of A$1.184 billion for the first six-month period.

The move represents another step in Kirin's ambitions to expand and diversify its global operations. Growth in Japan's food and beverage sector has been sluggish, with a shrinking population eroding the overall customer base. The company hopes to raise its overseas sales ratio to 30 per cent by 2015.
 
Kirin also announced plans in February to buy a 43 percent take in the brewery unit of Philippine food and beverage conglomerate San Miguel Corp.