Blog: Dean BestIt's merger time for Suntory (and Kirin Holdings)

Dean Best | 21 July 2009

Our sister site just-drinks has been busy keeping tabs on the possible merger between Japanese giants Kirin Holdings and Suntory.

At first glance, the deal, should it go through, would likely have more impact on Japan's flagging beer market. A merger would create a company that would control around half of the suds sector in Japan.

Nevertheless, it does affect our sector. Kirin's food interests including two Australian giants - Dairy Farmers and National Foods - while Suntory has various health food brands - including Sesamin and Power of Nature - and also distributes Haagen Dazs ice cream.

There have been fears that the deal could hit anti-trust hurdles in Japan. "It is not at all certain that a deal is really going to happen. The hurdles ahead are by no means small," one analyst told the National Post earlier this month.

On just-drinks today, however, another industry watcher insisted the merger would likely go through - as the Japanese government had already voiced its approval.

"The FTC is more than likely to approve such a deal as the Government has already voiced its support," an analyst at JP Morgan Japan said.

"Japan wants a large, strong and robust company like this to compete effectively in the global marketplace."

After months of quiet on the mega-M&A front, this potential merger has got the market talking. Some reports have said the merger would give a combined Kirin and Suntory a similar level of revenue to the likes of PepsiCo and Kraft Foods.

If the merger is approved, it could herald a round of consolidation, particularly in Asia-Pacific.


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