Kirin and Suntory scrap merger

The merger plan, first unveiled in July 2009, would have created a company with annual revenue of about Y 3.8 trillion (USD 49 billion), rivalling the world’s leading brewer AB-InBev in terms of sales.

But while Kirin, with a market capitalisation of more than Y 1.3 trillion (USD 14.5 billion), outweighs privately-held Suntory in terms of size, the Suntory family’s near 90 percent stake in their company meant they could have ended up with a controlling stake of over one-third of the merged firm.

The reason for the merger was to create a company big enough to provide the economies of scale needed to survive in a domestic market which will continue to decline.

When the news broke that the merger talks had been abandoned, a Kirin spokesman reportedly said: “We not only disagreed on the merger ratio. We could not reach an accord because of various other factors, and decided that we cannot see the new entity maintaining independence and transparency as a public company.”

Suntory confirmed the merger talks were over, saying it hadn’t been able to reach a deal due to factors such as the merger ratio.