Australian beverage major Lion Nathan has told shareholders that it would take another week to take over Japanese brewer Kirin, pending finalisation arrangements in the $3.5-billion deal.

Announcing the terms of the deal, Lion and Kirin last week said that they would do their best to settle the terms and execute  a mutually satisfactory scheme implementation agreement.

However, in a release to the Australian Securities Exchange on Monday, Lion said it was still in the negotiating process with Kirin.

The company said it expected an implementation agreement would be settled and executed by next week. According to analysts it could take until 15 May to finally hammer out the deal.

Lion has accepted Kirin's $11.50 per share plus a 72c special dividend offer for every Lion share the Japanese company buys with target acquisition of $6.5 billion. Lion chairman Geoff Ricketts said last week that negotiations had bogged down on terms related to the merger process agreement.

The bone of contention is whether the 50c special dividend should be delivered to shareholders by way of a capital return or another form of tax-advantaged payment such as a buyback, according to analysts.

Kirin holds a 46-per cent stake in Lion and this is the first time in 11 years since it came to acquire the stake that it is making a bid for a full takeover. This follows Coca-Cola Amatil's decision to reject a Kirin-backed takeover bid by Lion earlier this year.

Further delays in reaching an agreement on the scheme of implementation agreement could push back the deal implementation to as late as October.

The scheme can go ahead with the support of only a majority of the 54-per cent non-Kirin shareholders of Lion tendering at least 75 per cent of the non-Kirin stock. Institutional investors who are in possession of at least 40 per cent of the stock not with Kirin are said to support the takeover.

Australaia  brewer Lion Nathan is the maker of premium alcoholic beverages and has been in operations in Australia and New Zealand. It was formed with the merger of LD Nathan & Co and Lion Breweries in 1988. Lion Nathan markets a range of beer wines, RTDs and spirits and owns nine breweries and a contract bottling plant in Australia and New Zealand.

The company is an ASX100 company with more than 3,200 employees in Australia and New Zealand.