Japan’s Kirin Buys Controlling Stake in Brazil Brewer

on 02/08/11 at 11:08 am

Industry

Japan’s Kirin Holdings Co. (2503.TO) Tuesday announced the purchase of a controlling stake in Brazil’s second biggest brewer, family-held Schincariol, in a deal more likely to shake up the Brazilian company than the Brazilian beer market.

Kirin will pay $2.56 billion for a 50.45% stake in Schincariol.

“The biggest change will be in Schincariol itself,” said Adalberto Viviani, who works with brewers in promoting sports events as part of a Sao Paulo company called Concept Marketing. “Kirin will introduce professional management. We could also see a shift in emphasis from beer to Schincariol’s other products, including soft drinks and juices.”

For Kirin, the attraction is an opportunity to join the fray in a growing market.

“In Brazil, it would be very difficult to start in the beverage market from scratch,” said Renato Prado, an analyst at Sao Paulo’s Fator brokerage. “Kirin is buying its way into the market. Schincariol comes complete with brewing facilities, a brand name and the all-important distribution networks.”

These latter are crucial in a country where exclusive distribution is still the rule in many regions, especially growth areas such as the Amazon Basin and the Northeast.

“Brazil is one of the few countries with major growth potential for brewers,” said Prado.

{FULL STORY via WSJ}

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