Japan's Kirin clinched Fancl takeover to propel health pivot, president says
29/08/2024 01:44
By Mayu Sakoda and Rocky Swift
TOKYO, Aug 29 (Reuters) - Japan's Kirin Holdings
2503.T has secured enough shares to take over supplement maker
Fancl 4921.T , its new president said, overcoming rival buying
by an overseas fund and furthering the beermaker's transition
into healthcare.
Takeshi Minakata, who rose to the top role in the company in
March, said he wanted to declare victory when Kirin's tender
offer was due to close on Wednesday, but financial regulations
forced an extension to Sept. 11 after Hong Kong-based MY.Alpha
Management lifted its stake in Fancl to around 10%.
"We are confident about it," Minakata told Reuters on
Wednesday. "It's a bit of a shame that investors will have to
wait another 10 days, but our stance hasn't changed, nor the
money amount, and we believe the Kirin group is the best partner
for Fancl."
With previous roles heading Kirin's drug subsidiary and
vitamin maker Blackmores Ltd, purchased in 2023 for $1.2
billion, Minakata's accession signalled a resolve to pivot from
alcohol businesses that face shrinking markets in Japan and
shifting consumer tastes overseas.
Kirin in June launched a 220 billion yen ($1.5
billion)tender offer for the roughly 70% of Fancl it did not
already own. Kirin later extended the tender period and raised
its offer amid continued share purchases by MY.Alpha.
MY.Alpha, which has managed the Asian hedge fund business of
York Capital Management Global Advisors, did not reply to a
request for comment on its investment strategy in Fancl.
Fancl, known for its skin cleansing oils and nutritional
additives, fits into a health science portfolio that Kirin aims
to grow into a new pillar of the group along with alcohol and
pharma. The company aims to expand the unit's annual revenue to
500 billion yen, about five fold last year's tally.
But organic growth will not be enough to get there, likely
necessitating more overseas acquisitions, Minakata said.
"We are naturally aiming for companies with a certain level
of unique technology, products and brands," he said. "In that
sense, North America is a big market that is still growing
significantly. I think it has great potential."
Minakata joined Kirin in 1984, two years after the company
leveraged its fermentation know-how to make its first foray into
the pharma sector. He acknowledged it may take time for
consumers, particularly those overseas, to associate the Kirin
brand with drugs and health food rather than alcohol.
With Japanese retail giant Seven & i Holdings 3382.T
receiving a surprise takeover bid from Canada's Alimentation
Couche-Tard ATD.TO last week, the possibility of foreign
buyouts has become all the more salient. Minakata said Kirin
would have to consider any serious offer it received.
"We have to keep in mind that such a possibility is not zero
at all," he said. "We need to demonstrate that each of our three
main businesses is finding value in its own way, and we need to
do so more effectively."
($1 = 144.4300 yen)
(Reporting by Rocky Swift; Editing by Stephen Coates)
((rocky.swift@thomsonreuters.com;))