Japanese brewer Asahi in talks to buy local soft drinks giant Calpis for $1.2 bn

Japan's largest brewer Asahi Group Holdings is considering buying local soft drinks giant Calpis Co in a deal reportedly worth $1.2 billion, the company said in a statement on Friday.

Tokyo-based Asahi, known for its popular "Super Dry" beer, responded to media reports on the potential acquisition by saying, "A press report on Friday referred to our purchase of a domestic drinks maker, but this report was not based on something announced by the company. We are considering such a purchase, but nothing specific has been decided."

Japanese paper Nikkei yesterday reported that Asahi is close to buying Calpis for up to 100 billion yen, in what will likely be the biggest deal yet in Japan's soft-drinks market.

Asahi plans to use the brand value of Calpis lactic acid drinks to expand its share of the soft drink market and strengthen its beverage business in a field other than beer, said the report.

Asahi is the fourth-largest in the domestic soft drink market with a 10 per cent market share, and the acquisition will take it to the third spot behind US beverage giant Coca-Cola and Suntory Beverage & Food Ltd.

Calpis is a subsidiary of Ajinomoto Co, which acquired a 75 per cent stake in the popular yogurt-flavoured drinks maker in 2007 for around 52 billion yen.

In 1904, Kaiun Mishima, the founder of Calpis, visited Inner Mongolia and saw locals making cultured milk by fermenting cow or horse milk with lactobacilli. Upon returning to Japan, he began to develop a tasty and healthy drink with cultured milk and introduced the first lactic acid drink in Japan in 1919.