Japanese brewer Kirin plans to acquire Fancl for $1.4 billion

Japanese brewer giant Kirin announced today that it will acquire all shares of Japanese cosmetics and food supplement company Fancl for approximately $1.4 billion (1.3 billion euros), a move aimed at reducing its dependence on depressed core markets.

Kirin Group acquired a 33% stake in Fancl in 2019. The group now intends to acquire the remaining shares through a tender offer and warrants, which will begin on the 17th of this month. Kirin Group expects to invest approximately 220 billion yen in the acquisition.

Through this acquisition, Kirin hopes to strengthen its long-standing immunology research, its ability to develop and produce high-value-added ingredients through fermentation and biotechnology, and its health food business base in the Asia-Pacific region. For the same purpose, Kirin already acquired Australian vitamin and food supplement manufacturer Blackmores for more than $1 billion last year.

"By commercializing ingredients produced using natural fermentation technology, leveraging the customer understanding gained from Kirin Holdings and Fancl's strong relationships with consumers, and delivering them to consumers through multiple channels in the Asia-Pacific region, Kirin Group will contribute to addressing consumers' health issues in the cosmetics and health food businesses and further enhance its position in global markets outside Japan," Kirin said in a statement.

The drinks giant hopes to complete the deal by the end of this year, after which Fancl will be delisted, a spokesman for the group told AFP.

Alcoholic beverages accounted for nearly half of Kirin's turnover and nearly 60% of its operating profit in 2023. However, the group is pessimistic about the prospects of the market due to Japan's declining population and changing consumer tastes.

Kirin hopes the acquisition of Fancl will help improve the performance of its health-related products division (5% of its total sales), which suffered an operating loss last year.

The global food supplement market is estimated at $177.5 billion in 2023 and is expected to grow at an annual rate of 9.1% by 2030, according to analyst firm Grand View Research.