Kirin Holdings announced it will launch a tender offer to fully acquire Fancl, a leading Japanese maker of skin care products and dietary supplements. This strategic move is aimed at diversifying Kirin’s business as it navigates a flat beer market. Kirin, which currently holds a 33% stake in Fancl, plans to pay approximately 210 billion yen ($1.3 billion) to purchase the remaining shares, offering a 30% premium to Fancl’s last closing price of 1,884.50 yen on the Tokyo Stock Exchange.
Fancl is expected to support the acquisition, which will lead to its delisting once the deal is finalized by the end of the year. The company reported consolidated sales of 110.8 billion yen for the fiscal year ended March, a 7% increase year-on-year, and an operating income of 12.5 billion yen, up 60%.
Kirin’s primary revenue has traditionally come from its beer and alcoholic beverages, which generated 119.9 billion yen in profit for the year ending December 2023. However, its health science division posted a loss of 12.5 billion yen. Kirin anticipates that acquiring Fancl will bolster its health science division and turn it profitable.
The global market for vitamins and dietary supplements has grown significantly, driven by increased health consciousness and the expansion of the middle class in emerging markets. According to Euromonitor, the market grew 20% over the five years to 2023, reaching $133.6 billion. Kirin aims to capitalize on this trend, particularly in Asia.
This acquisition follows Kirin’s 2019 purchase of a one-third stake in Fancl for 130 billion yen and the 2023 acquisition of Blackmores, Australia’s largest vitamin and supplement company, for about 170 billion yen. These moves highlight Kirin’s strategic pivot towards the health food sector amid a long-term decline in beer sales, which have fallen 23% in Japan over the past decade.
Kirin’s focus on health and wellness products reflects a broader industry trend as the company seeks to adapt to changing consumer preferences and demographic shifts.
