Japan: Kirin, Suntory to submit merger plan to regulator

Kirin Holdings Co. and Suntory Holdings Ltd. plan to ask the Fair Trade Commission for a preliminary investigation into whether their proposed merger runs counter to the Antimonopoly Law, Kyodo News cited industry sources saying on September 8th.

Kirin and Suntory have been in talks to reach agreement as early as this year on integrating themselves into one of the world's largest beverage makers.

But as their combined share of Japan's beer market would exceed 50 percent, they are concerned about whether the FTC would approve the deal.

If the FTC gives its preliminary approval to the proposed merger, the talks may make progress, according to the sources.

Kirin spokeswoman Marina Totsuka and Suntory spokeswoman Naoko Tsuda both declined to comment on the progress of merger talks when contacted by Bloomberg News.

Japan's beer market has shrunk 15 percent in volume terms in the past decade as the nation's population rapidly ages -- a demographic shift that has prompted Suntory and Kirin to aggressively diversify out of Japan and away from beer.

Kirin and Suntory said in July they had begun preliminary talks to create a food and beverage giant with around $40 billion in annual sales, and a Kirin executive said last month that the two could agree as early as this year to a merger.

Kirin Holdings rose 2.1 percent to 1,381 yen after Suntory said it was in talks to buy soft drinks maker Orangina from its private equity owners.

11 September, 2009