Oct. 19 (Bloomberg) -- Kirin Holdings Co., Japan's biggest brewer, is in talks to buy Kyowa Hakko Kogyo Co. to triple the size of its drug unit as beer sales stall.
The talks, reported earlier in the Nikkei newspaper, were confirmed by Kirin spokesman Hiroki Umezawa. Kyowa Hakko shares surged to a seven-year high, pushing up the Tokyo-based company's value 17 percent to 560 billion yen ($4.9 billion).
Buying Kyowa Hakko would give Kirin a maker of allergy drugs and developer of cancer treatments that more than doubled first-half profit. Beer production in Japan fell in the first half to the lowest since records began in 1992.
``It's a good move for Kirin to strengthen its drugs and biotechnology business,'' said Shunichiro Manome, an equities analyst at Cosmo Securities Co. in Tokyo. ``There's little growth in Japan's beer market.''
The Tokyo-based beermaker is seeking to purchase more than 50 percent of Kyowa Hakko to merge with its own drug unit, the Nikkei said, without saying where it obtained the information. The acquisition would cost more than 300 billion yen if a 30 percent premium was paid, the report said.
<full article here>
