The two brewers began talks eight months ago with the aim of building the scale needed to keep pace with global consolidation sweeping across the industry and grow outside the Japanese market, which is shrinking along with the population.
The deal was complicated by the two companies' different corporate cultures. While Kirin is listed and based in Tokyo, unlisted Suntory calls the western city of Osaka its home and is 90 per cent owned by its founding family.
The collapse of the merger talks, which would have created a group on a par with Pepsico and Kraft Foods in revenue, pushed Kirin’s stock down 7.4 per cent yesterday. The stock hit its lowest in five months and more than 18m Kirin shares traded, their most active day in 23 years. Shares of rival Asahi Breweries tumbled as well, falling 5.5 per cent as investors viewed the news as a setback in the consolidation of Japan’s overcrowded beverage sector.
Kirin president Kazuyasu Kato said the two were not able to agree on how to control the merged company. “We determined we would not be able to gain understanding from stakeholders for management independence and transparency of the merged company as a listed entity,” he said.