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Kirin USD 1.5bn takeover bid for Kyowa Hakko

Japanese brewer Kirin has placed a USD 1.5bn bid for pharmaceutical company Kyowa Hakko Kogyo, which has accepted the offer

Japanese brewer Kirin has placed a USD 1.5bn bid for pharmaceutical company Kyowa Hakko Kogyo, which has accepted the offer.

Kirin will merge its pharmaceutical unit with Kyowa Hakko in 2008.

Kirin will purchase 50.1 per cent of Kyowa's outstanding shares through public bidding and swapping Kirin with Kyowa Hakko shares, according to a joint statement.

Of the 50.1 per cent acquired, Kirin will then buy 28 per cent, or 111,578,000 shares in Kyowa through the public bidding.

Kirin is offering to buy Kyowa shares at JPY 1,500 (USD 13.17) each, or 7.6 per cent higher than the share's last trading price, which puts the total value of bidding at JPY 167.4bn (USD 1.5bn).

Japanese breweries have been diversifying to offset slowed growth, as consumers have changed their drinking habits; switching to wine and other alcoholic beverages.

Kyowa Hakko's stock fell 0.57 per cent to rest at JPY 1,394 (USD 12.20) on the Tokyo Stock Exchange in a.m. trading on 22 October, a better performance than the 3.2 per cent drop in the key Nikkei-225 index following heavy losses on Wall Street.

Kyowa will become a consolidated subsidiary of Kirin in April 2008 and will have a combined drug business revenue of about JPY 200bn, putting it on par with the industry's 10th-largest company, Shionogi.

Kyowa and Kirin will merge on 1 October 2008 to create Kyowa Hakko Kirin, led by Kyowa Hakko's president, Yuzuru Matsuda.

Kirin president Kazuyasu Kato said at a news conference: "We aim to be a Japanese company that is strong in research and development and can vie with the world's top firms."

30th September 2008

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