Japanese brewers Kirin and Suntory call off merger talks
08 Feb 2010
Japanese beverage companies, Kirin Holdings and Suntory Holdings, yesterday called off their seven-month-long merger talks, dashing the possibility of creating the world's fifth-largest food and beverage companies.
The merger talks started in July last year (See: Japan's Suntory to enter Europe with $3.8-billion Orangina deal) and both brewers could not agree on a merger ratio, which would have determined control as well as management independence and transparency in a merged company.
"Kirin had been negotiating on the premise that the new entity would be managed as a listed company in order to ensure appropriate management independence and transparency. However, it became apparent that Suntory held a different view on this matter," Kirin said in a statement.
The proposed merger had the potential to create a food and beverage giant with combined annual sales of approximately $42.5 billion, catapulting it into the top spot in the food and beverage sector, on par with Kraft Foods and Coca-Cola.
"Suntory determined to terminate the negotiation because, while Suntory studies what the integrated new company should be, Suntory acknowledged discrepancy of understandings of two companies, including integration ratio and considered that it would be difficult to realise a desirable new integrated company which Suntory had been seeking for," Osaka-based Suntory said in a statement.
Suntory, a privately-held company run by the Saji family, which owns about 90 per cent of the company, was aiming to become the new entity's largest shareholder with a one-third stake.
