Kirin to speed up merger talks with Suntory to expand growth abroad+

TOKYO, July 24 Kyodo -
Kirin Holdings Co. will speed up merger talks with Suntory Holdings Ltd. in a
bid to secure its footholds in Asia and Oceania as growth opportunities dwindle
in the home market, its president Kazuyasu Kato said Friday.

''We will carry out the negotiations with fairness and speed,'' Kato said in an
interview with Kyodo News, adding the talks are likely to generate concrete
results by the year-end or early next year.
Kirin, Japan's second-largest beer maker, and Suntory, the No. 3 brewer,
recently began talks for an integration that would create one of the world's
largest beverage and food companies with combined consolidated sales of around
3.80 trillion yen.
''We will be able to share the strengths we each have at home and abroad and
share similar visions and dreams,'' Kato said when asked why he chose Suntory
as a tie-up partner.
Kato, 64, said the talks will be conducted on an equal footing but added that
many of the details are yet to be worked out, including the integration ratio
and the listing of the merged entity.
Kirin, which aims to raise its overseas sales and profit ratio to more than 30
percent by 2015, has been aggressively buying foreign firms in recent years in
the face of a saturated beverage market at home due to Japan's declining
birthrate and aging population.
''There is an air of crisis,'' Kato said. ''In the long run, changes will
surely be called for.''
Under the auspices of Kato, who studied at the Massachusetts Institute of
Technology and earlier headed Kirin's U.S. unit, the company acquired
Australia's leading and second-largest dairy firms National Foods Ltd. and
Dairy Farmers Ltd.
It also bought a 48.3 percent equity stake in the Philippines' San Miguel
Brewery Inc. and has inked a deal to turn Australian beer maker Lion Nathan
Ltd. into a wholly owned subsidiary.
Kato said the merger with Suntory would allow Kirin to further boost its global
competitiveness. But he admitted there are challenges in pursuing an expansion
strategy based not only on volume but also on quality through raising
efficiency and generating synergy benefits.
Analysts have pointed out the difficulties of integrating the wide-ranging
operations and far-apart corporate cultures of the Tokyo-based and listed Kirin
and the Osaka-based and unlisted Suntory.
''Both of us are sailing very smoothly, but if we consider the various
environments, it's necessary to take the next step and that is why we decided
to hold discussions,'' Kato emphasized.
==Kyodo
2009-07-24 23:01:28