Kirin Buys National Foods for $2.6 Billion

Japanese brewery Kirin Holdings said on Thursday that it would buy Australian dairy and fruit juice producer National Foods for A$2.8 billion (US$2.6 billion) from Philippine food and beverage company San Miguel Corporation.

Kirin said that the purchase price includes interest-bearing debt of about 200 billion yen (US$1.77 billion) held by National Foods.

Kirin may now attempt a merger deal with National Foods rival, Dairy Farmers, to minimize the impact of rising dairy prices.

Faced with a saturated domestic market, Kirin, which has a 20 percent stake in San Miguel, is seeking to accelerate acquisitions overseas and non-core businesses and has earmarked 300 billion yen (US$2.64 billion) for strategic investments from 2007 to 2009.

Beverages giant Kirin has said in July it was in preliminary talks to invest in San Miguel's Australian food and drink assets.

A San Miguel source has previously told Reuters that the company was seeking to sell its stake in National Foods, which it bought for A$1.9 billion ($1.6 billion) in 2005, to pay down debt and fund a move into mining, power and infrastructure at home.

National Foods is Australia's largest processor of drinking milk, dairy products and juice.