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Kirin to Bid for Kyowa Hakko in $2.6 Billion Deal

Japanese brewer Kirin Holdings said on Monday it will bid for control of drugmaker Kyowa Hakko Kogyo in a $2.6 billion deal, with the aim of merging it with its drug unit Kirin Pharma.

Kirin said it would offer 1,500 yen per Kyowa Hakko share to acquire a 27.95 percent stake, or 111.58 million shares.

The offer price represents a 25 percent premium to Kyowa Hakko's closing price on Thursday, one day before news of the planned merger was reported by the Nikkei business daily.

Kirin Pharma will then conduct a share swap with Kyowa to take 177.24 million new shares in Kyowa, boosting Kirin Holdings' stake in the drug maker to 50.1 percent.

Assuming 1,500 yen reflects the per-share value of Kyowa before the new share issue, the value of the deal will come to 300 billion yen (US$2.64 billion).

Following the official announcement on Monday morning, Kirin shares were down 4 percent at 1,522 yen by midday, while Kyowa Hakko was down 0.4 percent at 1,396 yen.