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April 27, 2009

Agreement Reached to Make Lion Nathan a Wholly-Owned Subsidiary of Kirin Holdings Company
Lion Nathan Board Recommends Acquisition Proposal From Kirin Holdings Company

Tokyo, April 27, 2009— Kirin Holdings Company, Limited (President and CEO Kazuyasu Kato; hereafter, "KH") announced today that it has reached an agreement with Lion Nathan Limited (Sydney, Australia; CEO Rob Murray; hereafter, "LN"), a 46.13%*1 owned and affiliated company of KH, in relation to the key terms of a proposal to acquire all the remaining 287,786,220 shares in LN (53.87% of the issued and outstanding shares in LN*1) (hereafter, "Proposal").

Since KH acquired its shareholding in LN in April 1998, KH and LN have worked together in promoting Kirin Group's comprehensive beverages strategy in Oceania. This Proposal will further drive that process. Furthermore, the Proposal will also support KH's objective of strengthening its offshore earnings base. The Proposal is to be implemented by a scheme of arrangement, which will require LN shareholder approval and Australian court approval (hereafter, "Scheme"). If the Scheme is approved and implemented, KH will own all the issued 534,240,495 shares in LN and LN will be delisted from the Australian Securities Exchange and New Zealand Stock Exchange.

Under the terms of the Proposal, Kirin will pay cash consideration of A$11.50 per LN share, representing a total funding requirement of A$3.3bn. Kirin will also agree to LN paying a fully franked interim distribution of 22 cents per share and a fully franked special distribution of 50 cents per share to LN shareholders at the implementation of the Scheme.

KH's President and CEO, Kazuyasu Kato, commented:

"The proposal to acquire the shares in Lion Nathan we do not already own is a logical next step in achieving our long term growth strategy of becoming a leading company in the areas of beverages, food and health across Asia and Oceania."

"After 11 years as the largest shareholder we have the utmost respect for the Lion Nathan management team and believe together we will grow the Lion Nathan business going forward."

LN's Independent Directors have agreed to unanimously recommend that LN's shareholders vote in favour of the Scheme, in the absence of a superior competing proposal, subject to receipt of an Independent Expert Report concluding that the Scheme is in the best interest of LN's shareholders and LN and KH agreeing a satisfactory Implementation Agreement.

The Proposal is also conditional upon receipt of any required third party, regulatory or other consents, no material adverse change and other customary conditions precedent. KH and LN will use best endeavours to agree and execute a mutually acceptable Implementation Agreement within 7 days3.

KH's long-term group vision, as outlined in "Kirin Group Vision 2015", is to be a leading company in Asia and Oceania, and KH has been promoting a comprehensive beverages strategy in these regions by focusing on profitable operations in the area of "food and health". KH's Australian businesses, with combined Australasian revenues in excess of A$5.6 billion2, will be at the forefront of KH's growth strategy in the region. LN is a leading alcoholic beverages company in Australasia, with a strong management team and an excellent track record of achieving growth and profitability. If the Proposal is approved and implemented, LN's current Australian management team will have a mandate to continue to invest and grow KH's presence in the region and to provide additional value to LN customers.

KH Group will constantly seek to nurture close bonds with its customers and offer the happiness of food and health, based on its marketing slogan oishisa wo egaoni - taste that makes you smile.

KH has appointed J.P. Morgan and Deutsche Bank as financial advisers and Blake Dawson as legal advisers.

  • *1 Based on the number of issued shares in LN as at the date of this announcement.
  • *2 Kirin Australasian revenue of A$3.5bn for Kirin financial year ended 31 December 2008 and LN revenue of A$2.1bn for LN financial year ended 30 September 2008.
  • *3 There is no certainty that an Implementation Agreement will be agreed and executed by the parties or that implementation of the Scheme will occur.

Summary of the Acquisition of LN Shares

1. Method of Acquisition: Scheme of arrangement
2. Timing of Acquisition: Expected to complete in September 2009
3. Number of Shares to be Acquired: 287,786,220 shares
(53.87% of the issued and outstanding shares in LN *1)
4. Acquisition Price: A$11.50 per share
Total acquisition price: A$3.3billion

LN Corporate Fact Sheet

1. Company name Lion Nathan Limited
2. Head office Sydney, New South Wales, Australia
3. Representative Geoff Ricketts, Chairman
Rob Murray, CEO
4. Capital stock Net assets: A$877.9 million
Total assets: A$3,186.5 million
(As at 30 September 2008)
5. Financial results Net sales: A$2,094.2 million
Operating EBIT: A$507.0 million
(As at 30 September 2008)
6. Employees Approximately 3,071
(As at 30 September 2008)
7. Business description Significant brewing businesses in Australia and New Zealand including a joint venture with Heineken and an equity stake in Little World Beverages (listed on the Australian Stock Exchange)
LN also operates businesses in premium wine, spirits and RTDs (including a joint venture with Bacardi and distribution arrangement operating as Fine Wine Partners)
8. Core Brands Beer: Tooheys, XXXX, Hahn, Boag's, Steinlager, Speights
Wine: Petaluma, Wither Hills, St Hallet
9. Manufacturing base 9 major facilities excluding wineries and contract bottling plants
10. Company milestones
1861  Started brewing with Lion brand
1923  10 leading brewing companies merged to form New Zealand Breweries (Name changed to Lion later)
1988  Lion Nathan was formed when New Zealand's largest retailer, LD Nathan & Co, merged with brewer, wine and spirit manufacturer and hotel operator, Lion Breweries
1990  Acquired 50 percent share in Natbrew Holdings which owned Alan Bond's brewing assets in Australia including Castlemaine Tooheys and Swan Brewing
1992  Acquired the remaining 50 percent of Natbrew Holdings
1993  Acquired New South Wales boutique brewer, Hahn Brewing, and the South Australian Brewing Company
1995  Entered the Chinese beer market through the purchase of a controlling interest in the Taihushui brewery
1998  Kirin Brewery acquired 46 percent interest in the company
2000  Shifted its domicile to Australia from New Zealand
2002  Acquired New Zealand wine company Wither Hills
2004  Sold the Chinese beer business to China Resources Breweries
2008  Acquired Tasmanian brewer J. Boag & Son

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© 2007 Kirin Holdings Company, Limited.

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