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Kirin looks to hike stake in San Miguel Brewery

by Yuki Yamaguchi

Bloomberg

Kirin Holdings Co. said it is interested in raising its stake in San Miguel Brewery Inc.

Kirin, which holds about 48 percent of the Philippine beermaker, would weigh boosting its stake in the brewer if offered, President Senji Miyake said at a news conference in Tokyo on Thursday, without elaborating. San Miguel Corp. owns 51 percent of the beermaker.

Ramon Ang, the billionaire chief of San Miguel, said last month he has received several bids of as much as $6 billion for its 51 percent stake in the brewery unit, and that Kirin hasn’t offered to buy the remaining stake.

The Japanese company’s show of interest comes amid a forecast for profit this year that misses analysts’ estimates as sales expand at a slower pace.

San Miguel “is the essential part of Kirin’s Asia strategy,” said Mikihiko Yamato, deputy head of research at JI Asia in Tokyo. “Kirin should certainly have the majority stake as San Miguel has a massive market share in the Philippines.”

Ang couldn’t immediately be reached on his mobile phone for comment.

Kirin’s net income will probably fall 43 percent to ¥49 billion this year, Kirin, Japan’s biggest beverage maker, said in a statement Thursday. That compares with the ¥61.9 billion average of 13 analysts’ estimates compiled by Bloomberg. Sales may climb 1.6 percent to ¥2.29 trillion, the company projected.

The 2014 profit forecast trailed analysts’ estimates because the government’s plan to cut drug prices this year wasn’t fully factored into market expectations, Yamato said.

Operating profit at the medical and biochemical business, which accounted for 15 percent of group sales in 2013, will fall 19 percent to ¥44 billion this year because of the lower prices, Kirin said in a statement.

Net income rose 52 percent to ¥85.7 billion, while sales rose 3 percent to ¥2.25 trillion in the year ended December, the company said.

Kirin is exploring ways to increase overseas sales as it tries to decrease its dependence on the shrinking domestic market due to a falling population. The company lost a foothold in Southeast Asia after it sold its stake in Singapore-based beverage maker Fraser & Neave Ltd. to Thai billionaire Charoen Sirivadhanabhakdi last year.

Domestic shipments of regular, low-malt and quasi-beers dropped 1 percent in 2013, a record low for nine consecutive years, according to announcements from Japanese beer makers in January.