Kirin in Talks to Take Control of Kyowa Hakko

Japanese beer maker Kirin Holdings is in talks to take a majority stake in drug maker Kyowa Hakko Kogyo in a deal that could top 300 billion yen (US$2.6 billion), the Nikkei business daily
said on Friday, sending both companies' shares higher.

Kirin aims to use the acquisition to bolster its pharmaceutical business to help offset sluggish growth in its mainstay domestic beer operations, the newspaper said.

Kirin spokesman Yuji Matsueda confirmed the company was in talks with Kyowa Hakko, but said nothing had been decided. Kirin has no immediate plans to announce anything on the issue, he said.

Kirin is considering a variety of possibilities about business and capital tie-ups and is also talking with other companies on various topics, the spokesman said.

In the Asian morning session Friday, shares of Kirin rose 1.5 percent to 1,591 yen, outperforming a 1.4 percent fall in the benchmark Nikkei 225 Average.

Kyowa Hakko was untraded due to a glut of buy orders at 1,322 yen, up 10 percent from Thursday's close.

Kirin plans to acquire more than 50 percent of Kyowa Hakko's shares in a tender offer, but would allow Kyowa Hakko to keep its listing on the Tokyo Stock Exchange, the Nikkei said.

Kirin plans to merge its drug unit Kirin Pharma with Kyowa Hakko, creating an entity with combined pharmaceutical sales of about 200 billion yen, roughly the same as the industry's 10th-largest player, Shionogi & Co, the paper said.