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August 2, 2011

Kirin Consolidates Schincariol Group

Kirin Holdings Company, Limited (Tokyo, Japan: President and CEO: Senji Miyake; hereafter, "Kirin"), at its Board of Directors meeting on the night of August 1, 2011 resolved and today signed a share purchase agreement to acquire all outstanding shares of Aleadri-Schinni Participações e Representações S.A. (hereafter, "Aleadri"), a company that holds 50.45%*1 of the outstanding shares of Schincariol Participações e Representações S.A. (Brazil; CEO: Adriano Schincariol; hereafter, "Schincariol"). Schincariol is the controlling shareholder of the Schincariol group companies (collectively with Schincariol, hereafter, "Schincariol Group"), a Brazilian beer and soft drinks producer. This acquisition will further enhance Kirin's international integrated beverages group strategy, providing Kirin with a solid base in the fast-growing Brazilian market in addition to the existing base in the Asia and Oceania regions.

  • *1  Based on the number of outstanding shares as of August 1, 2011

Kirin acquired all outstanding shares of Aleadri from Alexandre Schincariol and Adriano Schincariol (collectively referred to as the "Sellers") for BRL 3.95 billion*2 (¥198.8 billion). The share purchase was completed on August 2, 2011. Kirin funded the transaction through cash on hand and loans.*3

  • *2  BRL1=¥50.35 (as of August 1, 2011). This amount will be adjusted for Schincariol Group's closing net debt. The transaction value may increase by a maximum of BRL 0.1 billion (¥5.0 billion) subject to Schincariol Group's FY2011 performance.
  • *3  Citigroup Global Markets Japan Inc. acted as financial advisor to Kirin.

Schincariol Group is the 2nd largest beer producer in Brazil known for its Nova Schin, Devassa Bem Loura, Glacial, Baden Baden and Eisenbahn brands. Schincariol Group also produces and distributes carbonated soft drinks, juices and bottled water under the Schin and Skinka brands, among others, and ranks 3rd in the Brazil carbonated soft-drinks market. Schincariol Group has a nationwide distribution network and 13 modern production facilities, providing the optimal platform for further development of operations in the rapidly growing Brazilian market.

Under the "Kirin Group Vision 2015 (KV2015)," while Kirin endeavors to be a leading company in the Asia and Oceania regions and pursues a business strategy centered on these regions, Kirin is also exploring new business opportunities in other markets for its further development.

Brazil's beer and soft drink markets are large and promising markets with size of approximately ¥3 trillion each, which are expected to maintain stable growth powered by Brazil's economic expansion due to continuous population and personal income growth. Through this share purchase, Kirin will obtain a solid operational platform in Brazil, the biggest economy in Latin America, and will seek to further accelerate Schincariol Group's growth by combining Schincariol Group's brands with Kirin Group's technologies, product development, research and marketing capabilities.

Summary of the Purchase of Shares of Schincariol Group

1. Purchase Method: Negotiated transaction for the purchase of all outstanding shares of Aleadri-Schinni Participações e Representações S.A., a holding company owner of a controlling stake of Schincariol Group, based on a share purchase agreement*4
2. Date of Board Resolution: August 1, 2011
3. Date of Share Purchase: August 2, 2011
4. Number of Shares Purchased: 305,400,000 shares (100% of the total outstanding shares)
5. Purchase Price: BRL 3.95 billion (¥198.8 billion*5)*6
  • *4  Purchase will be implemented via Kirin Holdings Investments Brasil Participações S.A. (provisional name, it will be fixed on August 11, 2011), an SPC created with the only purpose to hold the Aleadri shares.
  • *5  BRL1=¥50.35 (as of August 1, 2011).
  • *6  This amount will be adjusted for Schincariol Group's closing net debt. The transaction value may increase by a maximum of BRL 0.1 billion (¥5.0 billion) subject to Schincariol Group's FY2011 performance.

Aleadri Fact Sheet

1. Company Name: Aleadri (Aleadri-Schinni Participações e Representações S.A.)
2. Headquarters: Itu, Sao Paulo, Brazil
3. Representatives: Representative Officer: Alexandre Schincariol
Representative Officer: Adriano Schincariol
4. Business Description: Holding company owner of a controlling stake of Schincariol Group
5. Capital: BRL 3,054,000 (¥153 million) (as of 12/2010)
6. Net Assets: BRL 1,026 million (¥51.6 billion) (as of 12/2010)
7. Total Assets: BRL 1,030 million (¥51.8 billion) (as of 12/2010)
8. Establishment: 1988
9. Shareholders /
Shareholding Ratio:		 CEO: Alexandre Schincariol    50%
CEO: Adriano Schincariol       50%
10. Relationship with Kirin: No capital, personal or transactional relationships

Schincariol Fact Sheet

1. Company Name: Schincariol Participações e Representações S.A.
2. Headquarters: Itu, Sao Paulo, Brazil
3. Representatives: Officer, Group CEO: Adriano Schincariol
4. Business Description:*7 Beer (81.6%): Soft Drinks (18.1%): Others (0.3%)
Numbers in brackets indicate revenues composition for the year ended December 2010
5. Major Brands:
  • Beer: Nova Schin, Devassa Bem Loura, Glacial,
    Baden Baden, Eisenbahn
  • Soft Drinks: Schin, Skinka
6. Capital: BRL 620 million (¥31.2 billion) (as of 12/2010)
7. Establishment: 1983
8. Shareholders /
Shareholding Ratio:		 Aleadri-Schinni Participações e Representações S.A.     50.45%
Jadangil Participações e Representações Ltda., others    49.55%
9. Number of Employees:*7 Approx. 10,000
10. Relationship with Kirin: No capital, personal or transactional relationships
11. Consolidated Financial Results for the Last Five Years (Unit: BRL millions)
Fiscal Year FY
12/2006*8		 FY
12/2007*8		 FY
12/2008*8		 FY
12/2009*9		 FY
12/2010*9
Net Asset 421 1,097 1,101 1,969 2,024
Total Asset 2,450 3,660 3,876 3,946 4,463
Gross Revenues 3,645 4,505 4,519 5,066 5,665
Net Revenues*10 2,003 2,538 2,344 2,608 2,854
EBIT 259 (23) (79) 48 124
Income before tax 284 39 (172) (21) 40
Net Income 152 114 (127) 75 54
  • *7  On consolidated basis.
  • *8  2006, 2007 and 2008 financials prepared under Brazilian GAAP.
  • *9  2009 and 2010 financials prepared under IFRS.
  • *10  Net Revenues exclude taxes on revenue and others.

Summary of Counterparties of Share Purchase

1. Name: Alexandre Schincariol
Adriano Schincariol
2. Address: Sao Paulo, Brazil
3. Relationship with Kirin: No capital, personnel or transactional relationships

Future Outlook

The share purchase and consolidation of Schincariol Group will occur in the third quarter of the fiscal year ending December 2011. The impact on Kirin's consolidated business results is under examination and will be disclosed as soon as examination is completed.