Bloomberg News

Kirin Wins Court Order Allowing Takeover of Brazil Beer Maker

October 11, 2011

Oct. 11 (Bloomberg) -- Kirin Holdings Co., Japan’s second- largest brewer by volume, won a Brazilian court ruling allowing it to proceed with its takeover of Schincariol Participacoes & Representacoes.

The court in Sao Paulo state in a ruling yesterday overturned a previous injunction blocking the deal, said Fabio Rosas, a partner at Tozzini Freire Advogados, the law firm representing Kirin. The injunction was granted Aug. 4 after minority shareholders Jose Augusto Schincariol, Daniela Schincariol and Gilberto Schincariol Junior sued, claiming they have the right of first refusal to the controlling stake that Kirin purchased in August.

On Aug. 1, Kirin paid 3.95 billion reais ($2.2 billion) for Aleadri-Schinni Participacoes & Representacoes SA, which owns 50.45 percent of Schincariol. The deal, which was the global beer industry’s second-largest this year, gave Tokyo-based Kirin a foothold in Latin America’s largest beer market with brands such as Nova Schin and Devassa, whose television ads feature socialite Paris Hilton.

“The acquisition was legitimate and was made with all the care in the world, so it’s not a surprise that the justice recognized it,” said Fabio Ozi, a partner at Mattos Filho Veiga Filho Marrey Junior & Quiroga Advogados, the law firm representing majority shareholder Adriano Schincariol and Aleadri-Schinni, who also appealed the injunction.

Resuming Talks

Yesterday’s ruling paves the way for Kirin to take control of the company’s administration and resume talks to buy out minority shareholders. The Japanese brewer has offered at least 2 billion reais for the minority stakes, a person with knowledge of the discussions, who asked not to be identified because the talks are private, said late last month.

Kirin hired UBS AG to advise on the talks with minority shareholders, two people familiar with the process said last month. Citigroup Inc. acted as adviser for the accord to buy the controlling stake.

Minority shareholders Jose Augusto Schincariol, Daniela Schincariol and Gilberto Schincariol Junior plan to appeal yesterday’s ruling, according to their law firm, Teixeira, Martins & Advogados.

Kirin’s Schincariol purchase was the second largest in the global beer industry this year, trailing SabMiller Plc’s A$9.9 billion ($9.9 billion) acquisition of Foster’s Group Ltd. in September.

Editors: Jessica Brice, Edward Johnson.


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