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July 10, 2006
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Notification with Respect to Share Exchange Agreement between
Kirin Brewery Co., Ltd. and Kirin Beverage Corporation
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Kirin Brewery Co., Ltd.
("Kirin Brewery") and Kirin Beverage Corporation ("Kirin Beverage") announced
today that they have entered into a share exchange agreement (the "Share Exchange
Agreement") in order to make Kirin Beverage a wholly-owned subsidiary of Kirin
Brewery pursuant to approvals by the respective boards of directors of Kirin Brewery
and Kirin Beverage.
| 1. |
Purpose of
Making Kirin Beverage a Wholly-Owned Subsidiary of Kirin Brewery
With the objective of making Kirin Beverage its wholly-owned subsidiary, Kirin
Brewery conducted a tender offer for Kirin Beverages' shares between May 12, 2006
and June 15, 2006 (the "Tender Offer"). As of today, Kirin Brewery holds
97.07% (53,392,016 shares) of Kirin Beverages' issued shares (55,002,370 shares).
Today, Kirin Brewery and Kirin Beverage agreed to make Kirin Beverage a wholly-owned
subsidiary of Kirin Brewery and entered into the Share Exchange Agreement, aiming
to achieve a dramatic allocation of resources to the soft drinks industry and
enhance intra-group synergistic effects in connection with the Kirin Group's corporate
restructuring. |
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| 2. |
Terms and
Conditions of Share Exchange |
| (1) |
Schedule (as planned) |
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| Monday, July 10, 2006 |
Approval by the board of directors of Kirin Brewery and Kirin
Beverage for entering into the Share Exchange Agreement and execution of such
agreement |
| Tuesday, July 11, 2006 |
Kirin Beverage's shares to be transferred to the "seiri post"
designated on the Tokyo Stock Exchange (the "Seiri Post") |
| Friday, August 11, 2006 |
Delisting date for Kirin Beverage's shares |
| Sunday, October 1, 2006 |
Deadline to submit share certificates of Kirin Beverage's shares |
| Sunday, October 1, 2006 |
Effective date of the share exchange (the "Share Exchange") |
| End of November, 2006 |
Date for cash delivery |
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| (Note 1) |
In accordance with Article 796, Paragraph 3 of the Company Law of Japan, Kirin
Brewery will conduct the Share Exchange without obtaining an approval at its shareholders'
meeting. |
| (Note 2) |
In accordance with Article 784, Paragraph 1 of the Company Law as applicable
to the provisions of Article 12, Paragraph 1 of the Law on Special Measures for
Industrial Revitalization (the "Industrial Revitalization Law"), Kirin
Beverage will conduct the Share Exchange without an approval at its shareholders'
meeting. |
| (Note 3) |
Pursuant to the deslisting standard of the Tokyo Stock Exchanges, Kirin Beverage's
shares will be transferred to the Seiri Post on July 11, 2006 and will be delisted
as of August 11, 2006. |
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| (2) |
Share Exchange |
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Kirin Brewery has obtained the approval of the Minister of the
Ministry of Finance with respect to its business restructuring plan pursuant to
the Industrial Revitalization Law and the approval as required in respect of a
share exchange for cash consideration under Article 12, Paragraph 9 of the Industrial
Revitalization Law prior to the revision under Article 449 of the Law Concerning
Developments of Related Laws in Enforcement of the Company Law, which remains
effective by virtue of the provision of Article 450, Paragraph 7 of the same law.
In accordance with the Share Exchange Agreement, in lieu of the issuance of shares,
cash delivery shall be made to Kirin Beverages' common stock shareholders, who
are on the final shareholders registry (including beneficial shareholders, but
excluding Kirin Brewery) as of September 30, 2006 (one day prior to the effective
date of the share exchange). Such cash delivery shall be made for consideration
of 3,350 yen per share of the common stock.
If Kirin Brewery's or Kirin Beverage's asset or management conditions are materially
changed or if any other events occur that may materially affect consummation of
the Share Exchange, Kirin Brewery and Kirin Beverage may revise the terms and
conditions of the Share Exchange Agreement or terminate the Share Exchange Agreement.
Furthermore, the Share Exchange Agreement is subject to provisions provided for
in Article 796, Paragraph 3 of the Company Law, and if Kirin Brewery cannot proceed
to conduct the Share Exchange without an approval of its shareholders' meeting
pursuant to Article 796, Paragraph 3 of the Company Law, the Share Exchange Agreement
becomes void. |
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| (Note 1) |
Basis for Determination of Cash Delivery upon the Share Exchange
Kirin Brewery and Kirin Beverage have discussed and mutually agreed that the amount
for cash delivery upon the Share Exchange shall be the same price as the purchase
price in the Tender Offer. The basis for this determination include the purchase
price in the tender offer by Kirin Brewery of Kirin Beverage's shares, financial
conditions of Kirin Beverage and other factors such as the past trend of the share
price, among other things.
Kirin Brewery and Kirin Beverage have engaged in their respective advisors prior
to discussing in respect of the amount for cash delivery above and have considered
the corporate value of Kirin Beverage as reported by Nomura Securities Co., Ltd.
("Nomura"), the advisor to Kirin Brewery, and by Mitsubishi UFJ Securities
Co., Ltd. ("Mitsubishi UFJ"), the advisor to Kirin Beverage. |
| (Note 2) |
Outcome, Methods and Basis of Calculation by Advisors
Nomura calculated the stock value of Kirin Beverage based on the discounted cash
flow ("DCF") method, the comparable company method and the market price
method. The valuation comprehensively took into account the results of these methods.
Mitsubishi UFJ calculated the stock value of Kirin Beverage based on the DCF method,
the comparable company method and the market price method. The valuation comprehensively
took into account the results of these methods. |
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| (3) |
Treatment of Stock Options or Corporate Bonds with Stock Acquisition
Rights
Kirin Beverage has not issued stock options or corporate bonds with stock acquisition
rights. |
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| (4) |
Accounting Treatment |
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Accounting is expected to be treated as in the case of transactions
under joint control. |
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| 3. |
Basic Information on Relevant Parties of the Share Exchange |
| (1) Corporate Name |
Kirin Brewery Co., Ltd.
(parent company) |
Kirin Beverage Corporation
(wholly owned subsidiary) |
| (2) Business |
Production and sale of beer, pharmaceuticals and others |
Production and sale of soft drinks |
| (3) Date of Incorporation |
February 23, 1907 |
April 15, 1963 |
| (4) Address of Head Office |
10-1, Shinkawa 2-chome, Chuo-ku, Tokyo |
1 Kanda-Izumicho, Chiyoda-ku, Tokyo |
| (5) Representative |
Kazuyasu Kato,President and Representative Director |
Yoshikazu Arai,President and Representative Director |
(6) Amount of Paid-In Capital
(as of
December 12, 2005) |
¥102,045 million |
¥8,416 million |
(7) Total Number of Issued Shares
(as of
December 31, 2005) |
984,508,387 shares |
55,002,370 shares |
(8) Shareholders' Equity
(as of
December 31, 2005) |
¥859,943 million |
¥85,455 million |
(9) Total Asset
(as of
December 31, 2005) |
¥1,512,515 million |
¥182,423 million |
| (10) End of Fiscal Year |
December 31 |
December 31 |
(11) Number of Employees
(as of
December 31, 2005) |
5,192 |
1,493 |
| (12) Major Customers |
Domestic and overseas alcohol beverage holesalers/distributors,
alcohol beverage manufacturers and others |
Kirin Brewery and other manufacturers/distributors of soft drinks |
(13) Major Shareholders and
Shareholding Percentage
(as of
December 31, 2005) |
Meiji Yasuda Life Insurance Company (4.44%)
The Bank of Tokyo-Mitsubishi, Ltd. (3.56%) (Note
2)
Moxley & Co. (3.45%)
Japan Trustee Service Bank, Ltd. (Trust Account) (3.35%)
State Street Bank and Trust Company (2.78%)
The Master Trust Bank of Japan Ltd. (Trust Account) (2.43%) |
Kirin Brewery Co., Ltd. (59.37%) (Note 1)
The Master Trust Bank of Japan Ltd. (Trust Account) (3.63%)
Japan Trustee Service Bank, Ltd. (Trust Account) (3.13%)
Kirin Beverage Employees Association (2.83%)
T.ZONE VI Fund Investment Association (1.06%)
State Street Bank and Trust Company (0.99%) |
| (14) Main Banks |
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Corporate Bank, Ltd.Mitsubishi UFJ Trust and Banking Corporation
The Norinchukin Bank |
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Mizuho Corporate Bank, Ltd. |
(15) Relationship between the
Parties |
Equity |
Kirin Brewery holds 53,392 thousand shares (97.07%) of Kirin Beverage. |
Human
Resources |
Kirin Brewery seconds one director and one corporate auditor to
Kirin Beverage. |
| Business |
Kirin Brewery produces and sells products of Kirin Beverage. |
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| (Note 1) |
As a result of the Tender Offer by Kirin Brewery for the shares of Kirin Beverage
(the last day of the Tender Offer was June 15, 2006), Kirin Brewery's percentage
ownership of the shares of Kirin Beverage as of today is 97.07%. |
| (Note 2) |
The Bank of Tokyo-Mitsubishi Ltd. merged with UFJ Bank on January 1, 2006
and its trade name changed to The Bank of Tokyo-Mitsubishi UFJ, Ltd. as of the
same date. |
| (Note 3) |
The Mitsubishi UFJ Financial Group, Inc. filed an amended large-volume shareholding
report in respect of Kirin Brewery on November 15, 2005, indicating its joint
holding with the Bank of Tokyo-Mitsubishi Ltd., Mitsubishi UFJ Trust and Banking
Corporation, Mitsubishi UFJ Securities Co., Ltd., Mitsubishi UFJ Asset Management
Co., Ltd., and MU Investment Corporation. However, since the Company is unable
to identify the precise numbers of shares beneficially owned by such companies
as of December 31, 2005, the Company did not include such companies in "Major
shareholders and shareholding percentage" above.
The shareholdings as of October 31, 2005 stated in the amended shareholding report
are as below. |
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| Name |
Address |
Number of
shares owned (thousands) |
Percentage of
all issued
shares (%) |
The Bank of
Tokyo-Mitsubishi, Ltd. |
7-1, Marunouchi 2-chome,
Chiyoda-ku, Tokyo |
39,585 |
4.02 |
Mitsubishi UFJ Trust and
Banking Corporation |
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo |
36,929 |
3.75 |
| Mitsubishi UFJ Securities Co., Ltd. |
4-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo |
828 |
0.08 |
| Mitsubishi UFJ Asset Management Co., Ltd. |
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo |
2,017 |
0.20 |
| MU Investment Corporation |
2-15, Nihombashi-Muromachi 3-chome, Chuo-ku, Tokyo |
25 |
0.00 |
| Total |
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79,385 |
8.06 |
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| (Note 4) |
According to the amended substantial shareholding report in respect of Kirin
Beverage filed on January 16, 2006 jointly prepared under the names of Barclays
Global Investors Trust Bank, Ltd. and seven other companies, the Company recognizes
that they hold the number of shares mentioned below as of December 31, 2005. However,
the Company cannot verify the number of shares held by beneficial shareholders
as of December 31, 2005, and so the Company has not considered them for the purpose
of determining "Major Shareholders and shareholding percentage" above.
The contents of the amended substantial shareholding report are as follows: |
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| Name |
Address |
Number of shares owned (thousands) |
Percentage of
all issued shares (%) |
| Barclays Global Investors Trust Bank, Ltd. and 7
other companies |
1-39, Hiroo 1-chome, Shibuya-ku,Tokyo |
2,113 |
3.84 |
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| (16) Unconsolidated Financial Results of the Most Recent Three
Fiscal Years |
| (¥ millions) |
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Kirin Brewery Co., Ltd.
(parent company) |
Kirin Beverage Corporation
(wholly owned subsidiary) |
| Fiscal year |
December 2003 |
December 2004 |
December 2005 |
December 2003 |
December 2004 |
December 2005 |
| Net sales |
961,830 |
956,969 |
935,621 |
329,247 |
324,941 |
299,418 |
| Operating income |
55,911 |
52,945 |
58,154 |
13,142 |
18,499 |
13,418 |
| Ordinary income |
71,935 |
66,797 |
72,517 |
12,735 |
17,789 |
14,334 |
| Current term net income |
34,888 |
40,485 |
43,886 |
4,415 |
9,865 |
7,625 |
| Current term net income per share (yen) |
35.96 |
41.76 |
45.61 |
79.80 |
178.17 |
137.66 |
| Annual dividend per share (yen) |
12.00 |
13.50 |
14.50 |
22.00 |
24.00 |
26.00 |
| Shareholders' equity per share (yen) |
751.21 |
803.60 |
899.02 |
1,362.25 |
1,425.06 |
1,552.71 |
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| (17) Consolidated Financial Results of the Most Recent Three Fiscal
Years |
| (¥ millions) |
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Kirin Brewery Co., Ltd.
(parent company) |
Kirin Beverage Corporation
(wholly owned subsidiary) |
| Fiscal year |
December 2003 |
December 2004 |
December 2005 |
December 2003 |
December 2004 |
December 2005 |
| Net sales |
1,597,509 |
1,654,886 |
1,632,249 |
347,612 |
387,204 |
379,366 |
| Operating income |
101,555 |
109,392 |
111,708 |
14,743 |
19,623 |
16,090 |
| Ordinary income |
94,676 |
106,562 |
114,881 |
13,708 |
18,158 |
15,619 |
| Current term net income |
32,395 |
49,099 |
51,263 |
4,426 |
8,629 |
5,251 |
| Current term net income per share (yen) |
33.27 |
50.58 |
53.23 |
80.01 |
155.69 |
94.51 |
| Shareholders' equity per share (yen) |
831.84 |
888.65 |
1,016.74 |
1,426.35 |
1,466.40 |
1,552.71 |
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| 4. |
Status after the Share Exchange |
| (1) |
The corporate name, business, address of head office, representative,
and amount of paid-in capital
The corporate name, business, address of head office, representative, and amount
of paid-in capital of the relevant parties, which are stated in the foregoing
Section 3-"Basic Information on Relevant Parties", will not change as
a result of the Share Exchange. |
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| (2) |
Effects on Financial Results
The Share Exchange will not have any material impact on the consolidated financial
results of Kirin Beverage or the consolidated financial results of Kirin Brewery. |
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