[first sentense]

November 4, 2011

Schincariol Group to become a Wholly-Owned Subsidiary of Kirin

Kirin Holdings Company, Limited (Tokyo, Japan: President and CEO: Senji Miyake; hereafter, "Kirin"), signed and completed a stock purchase agreement on November 4 to acquire all outstanding quotas of Jadangil Participações e Representações Ltda. (hereafter, "Jadangil"), a company that holds 49.54%*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 of companies (collectively with Schincariol, hereafter, "Schincariol Group"), a Brazilian beer and soft drinks producer.

As disclosed in the press release dated August 2 titled, "Kirin Consolidates Schincariol Group", Kirin acquired 50.45% of the outstanding shares of Schincariol through Aleadri-Schinni Participações e Representações S.A. (hereafter, "Aleadri"), and as a result of today’s transaction, Kirin now owns all the outstanding shares*2 in Schincariol. This additional acquisition will not only enhance Kirin's governance over Schincariol as a wholly-owned subsidiary but will also help Kirin further increase the competitiveness of Schincariol in the fast-growing Brazilian market and generate synergies with Kirin, through which Kirin seeks to accelerate growth.

In addition, all parties to the precautionary measure and lawsuit have executed a settlement agreement to dismiss the precautionary measure and lawsuit (hereafter, "Settlement Agreement"). The Settlement Agreement has been lodged with the First Civil State Court of the City of Itu　(hereafter, "Court"), and we expect the Court to ratify the Settlement Agreement by November 8.

  • *1 Based on the number of outstanding shares as of November 4, 2011
  • *2 Including the acquisition of Schincariol shares directly held by two sellers of Aleadri and two sellers of Jadangil (less than 0.01% of the outstanding shares)

Kirin acquired the outstanding quotas of Jadangil from three quotaholders for BRL 2.35 billion (¥105.0 billion) *3, 4. The stock purchase is completed on November 4. Kirin funded the transaction through cash on hand and loans.

Kirin has now reached agreements with the sellers of Aleadri and the sellers of Jadangil for the acquisition of 100% of the outstanding shares of Schincariol for the total amount of BRL 6.30 billion.

  • *3 BRL1=¥44.69 (as of November 2, 2011).
  • *4 This transaction involved certain changes to the executed share purchase agreement between Kirin and the sellers of Aleadri. No change was made to the purchase price of all the outstanding shares of Aleadri (BRL 3.95 billion) disclosed on August 2.

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.

The Brazilian beer and soft drink markets are large and are expected to maintain stable growth. Kirin will seek to further enhance Schincariol Group’s operating platform and accelerate its growth by leveraging the Kirin Group's technologies, product development, research and marketing capabilities.

Summary of Quota Purchase

1. Purchase Method: Negotiated transaction for the purchase of all outstanding quotas of Jadangil Participações e Representações Ltda., the holding company of a 49.54% stake in Schincariol Group, based on a stock purchase agreement*5
2. Date of Quota Purchase: November 4, 2011
3. Number of Quotas Purchased: 857,576,190 quotas (100% of the total outstanding quotas of Jadangil)
4. Purchase Price: BRL 2.35 billion (¥105.0 billion*6)
  • *5 Purchase will be implemented via Kirin Holdings Investments Brasil Participações S.A., an SPC created with the sole purpose of holding the Aleadri and Jadangil quotas.
  • *6 BRL1=¥44.69 (as of November 2, 2011)

  • *7 In addition, adding the share purchase of Schincariol shares directly held by two sellers of Aleadri and two sellers of Jadangil (less than 0.01% of the outstanding shares) would result in Kirin owning all the outstanding shares in Schincariol

Jadangil Fact Sheet

1. Company Name: Jadangil (Jadangil Participações e Representações Ltda.)
2. Headquarters: Itu, Sao Paulo, Brazil
3. Representatives: Managing Partner: Daniela Maria Schincariol Medina
Managing Partner: José Augusto Schincariol
Managing Partner: Gilberto Schincariol Junior
4. Business Description: Holding company owner of 49.54% stake of Schincariol Group
5. Capital: BRL 3 million (as of 12/2010)
6. Net Assets BRL 1,008 million　(as of 12/2010)
7. Total Assets BRL 1,012 million　(as of 12/2010)
8. Establishment: 1988
9. Quotaholders /
Quotaholding Ratio:		 Daniela Maria Schincariol Medina33.33%
José Augusto Schincariol33.33%
Gilberto Schincariol Junior33.33%
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:*8 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　(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.49.54%
9. Number of Employees:*8 Approx. 10,000
10. Relationship with Kirin: No capital, personal or transactional relationships
11. Consolidated Financial Results for the Last Five Years*8
(Unit: BRL millions)
Fiscal Year FY
12/2006*9		 FY
12/2007*9		 FY
12/2008*9		 FY
12/2009*10		 FY
12/2010*10
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*11 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
  • *8 On consolidated basis.
  • *9 2006, 2007 and 2008 financials prepared under Brazilian GAAP.
  • *10 2009 and 2010 financials prepared under IFRS.
  • *11 Net Revenues exclude taxes on revenue and others.

Summary of Counterparties of Quota Purchase

1. Name: Daniela Maria Schincariol Medina
José Augusto Schincariol
Gilberto Schincariol Junior
2. Address: Sao Paulo, Brazil
3. Relationship with Kirin: No capital, personnel or transactional relationships

Future Outlook

The impact of the additional quota purchase (100% consolidation of Schincariol Group) on Kirin's consolidated financial results this year is expected to be limited.

In addition, Kirin will evaluate and incorporate any required adjustments to the shareholder structure of the Schincariol Group (including the treatment of the holding companies namely Aleadri and Jadangil).