Japan & Brazil: Kirin working on a growth strategy for Schincariol

The president of Kirin Holdings has said that the brewer is working on a growth strategy for Schincariol that will seek to win back investor confidence, Japanese media reported on November, 25.

Senji Miyake was this week quoted in an interview with Japan's Nikkei Report that he was surprised that Schincariol's minority shareholders filed an injunction against the Japanese firm. However, having resolved the dispute by agreeing a deal to take full control of the Brazilian brewer, Kirin is busy laying plans for growth.

Miyake told the paper that Kirin intends to have a new business plan in place at Schincariol by the end of 2011. It will also brew its namesake beer, Kirin Ichiban, in Brazil as part of a plan to gain greater share of the premium beer segment.

Several analysts have raised concern that Kirin is overpaying for Schincariol, which is weighted towards standard beers, has relatively low profitability and sits a distant second to AB InBev's AmBev unit in Brazil.

In August, Kirin agreed to buy a 50.45% stake in Schincariol for BRL3.95 bln (US$2.5 bln), valuing the Brazilian brewer at the equivalent of 20 times EBITDA. Following its deal to buy the rest of Schincariol for a further BRL2.35 bln, the total price paid values the Brazilian group at 13 times EBITDA, slightly higher than the average for recent brewing industry deals.

25 November, 2011