Japanese beer maker Kirin Holdings announced on April 27 th that it will acquire Australian natural health firm Blackmores for A$1.88 billion ($1.24 billion).
Kirin will acquire all the shares of the company in August and make it a wholly owned subsidiary.
The Blackmores acquisition will enable Kirin to grow its Health Science business’s product range and capabilities while broadening its geographic profile and growth opportunities.
This diversification push is part of the company’s long-term ‘Kirin Group Vision 2027’ to grow pharmaceuticals and food & beverages businesses into another core business of the Group.
Kirin will provide Blackmores with technology to develop new beverages, and Fancl Corp., Kirin’s health food subsidiary, will jointly develop products with Blackmores, company officials said.
Kirin also intends to expand its range of products containing its proprietary Lactococcus lactis strain plasma, utilizing Blackmore’s brand, established sales channels and expertise in food regulation.
Takeshi Minakata, head of the health science division at Kirin, said the new acquisition operates in “such a high growth sector” and will position Kirin to “become a leading company in health science in the Asia and Pacific region.”
Kirin offered AU$95 cash per share, a 23.7% premium to the stock’s last close, and has already entered a scheme implementation deed with Blackmores. Blackmores’ board unanimously recommended shareholders support the deal, with top shareholder and former Chairman Marcus Blackmore agreeing to vote his shares in favor.
Blackmores expects to declare a special dividend of AUD 3.34 per share when the deal goes through.
Kirin will secure funding for the acquisition through a loan and cash it already has on hand.
The deal will also provide an exit for Blackmores, which has been struggling to recover sales and engaged in public disputes after sales to China shoppers stopped under COVID-19 restrictions in 2020.
Kirin already has a strong presence in Australia, with operations including Lion, a major beer and dairy company, and National Foods, a dairy products manufacturer. Kirin is known for taking a long-term view and investing in companies for the long haul.
Marcus Blackmore expressed confidence in Kirin’s ability to improve Blackmore’s operations and lead the company to success.
Founded in 1932, Blackmores operates in 12 countries and regions outside Australia and sells a range of products, including supplements and powdered milk. Australia and New Zealand account for just under half its sales, with Southeast Asia and others making up 30 percent and China 25 percent.