Kirin Holdings keen to end Schincariol legal dispute

Kirin Holdings keen to end Schincariol legal dispute

Kirin Holdings is seeking to resolve an impasse between itself and Schincariol's remaining shareholders by acquiring their shares, according to a report.

Kirin wants to make Schincariol a wholly-owned subsidiary, Japan's Nikkei newspaper reported today (26 September). Since agreeing a deal to acquire a 50.45% stake in the Brazilian brewer in early August, Kirin has been bogged down in a potentially lengthy and costly legal battle with the group's remaining family shareholders.

In its last update on the situation, on 16 September, Kirin said that it has appealed against a court ruling that has temporarily suspended the transaction. Meanwhile, the Japanese brewer also faces a "main lawsuit" in a court in Itu, São Paulo, that seeks to annul its deal.

Despite this, Kirin remained upbeat. "Under the consultation from its Brazilian attorneys, Kirin is forging ahead with full faith in the legality and validity of the transaction and does not foresee any problems," it said.   

just-drinks understands from industry sources that, in spite of Brazil's beer market potential, other multinational brewers backed away from Schincariol as it became clear that family members were arguing about how much of the brewer to sell. 

Several analysts believe that Kirin has overpaid for its stake, having agreed to pay out BRL3.95bn (US$2.6bn. Schincariol is Brazil's second-largest brewer behind Anheuser-Busch InBev, but it only has an 11% volume market share, versus A-B InBev's 70% share.

"We remain intrigued as to what Kirin sees in Schincariol to pay such a rich - maybe even unprecedented - valuation," said JP Morgan analysts after the deal was announced on 2 August.