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Kirin To Challenge ABI, Heineken In Rising Brazil Following $2.5B Schincariol Purchase

August 2, 2011

Japan’s Kirin is set to take control of Brazil’s second-largest brewer, Schincariol, after a months-long chase rumored to have involved other global players like Heineken, Diageo and SABMiller. Kirin announced today that it will pay $2.5 billion to acquire a 50.45% stake in Schincariol from Aleadri-Schinni, the company led by Alexandre and Adriano Schincariol.

Much of the global beer industry’s M&A focus of late has been on SABMiller’s (so far) unsuccessful pursuit of Foster’s, but in the meantime, several of the sector’s larger players had reportedly sniffed around Schincariol—and its $1.8 billion in annual sales—before Kirin’s eventual play. Both Heineken, which is already among the leading brewers in Brazil through its Kaiser subsidiary, and SABMiller were linked to possible Schincariol bids earlier this year. Then, last month, Bloomberg reported that Diageo had abandoned its own pursuit of Schincariol due to disagreements among Schincariol family members concerning a prospective sale.

Those concerns apparently didn’t dissuade Kirin, which, like its rival Japanese brewers Asahi, Sapporo and Suntory, has actively sought overseas acquisitions in recent years to counter the tepid Japanese domestic market. Schincariol holds around 11% of Brazil’s 116-million hectoliter beer market (the world’s third-largest) through brands like Nova Schin, and plays mostly at the sub-premium end. Anheuser-Busch InBev (ABI) continues to dominate the Brazilian beer market with a volume share of 70% through its Brahma and Skol brands, and it’s extended its lead over second-ranked Schincariol in recent years.

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