Kirin seeks ¥220B Fancl cosmetics buyout to boost health science division and counter flat beer sales

19 Jun 2024 --- Kirin Holdings wants to buy the remaining shares of Japanese cosmetics company Fancl Corporation in a deal worth about ¥220 billion (US$1.4 billion). By turning Fancl into a wholly-owned subsidiary, Kirin hopes to boost its health science business and strengthen its global operating base, particularly in the Asia-Pacific region.

Kirin acquired approximately 33% of Fancl’s stock in 2019. The brewer also grew its Health Science business with the acquisition of Australian vitamins company Blackmores last year, in a deal worth about A$1.88 billion (US$1.24 billion).

It is keen to expand its health and wellness division further, especially after total beer sales dropped 5.9% in 2023. 

Stronger Health Science focus
Kirin Holdings says it wants to be a leader in “creating shared value” by combining its knowledge of food, beverages, pharmaceuticals and health sciences under its long-term vision, Kirin Group Vision 2027. 

The vision includes using Kirin’s fermentation, biotechnology and immunology expertise to address consumer health issues. The acquisition of Fancl is said to support its goal by combining Fancl’s D2C channels and consumer-centric product development with Kirin’s health food business foundation.

Fancl’s strong D2C channels and consumer-centric product development will complement Kirin’s Health Science business.Global expansion
According to Kirin, Fancl’s strengths include strong D2C channels, which account for 70% of sales, and a focus on eliminating consumer “negatives” through innovative product development. 

As a wholly owned subsidiary, Fancl will gain access to Kirin’s research in immunology and fermentation technology. The two will also collaborate on operating bases and purchasing data in Japan and abroad, deepen joint research and horizontally deploy environmental technologies.

The collaboration seeks to commercialize high-value ingredients and leverage the companies’ consumer relationships, says Kirin.

The acquisition is expected to create a competitive business model for delivering health solutions in Asia-Pacific. The integration will enhance Kirin’s presence in the cosmetics and health food sectors, expanding its market reach.

By Venya Patel