Japanese brewer Kirin Holdings Co., Ltd. acquired a 30.3% stake in cosmetics company Fancl Corp for 129 billion yen ($1.21 billion) moving further toward pivot to capitalize on the country’s wellness boom.

WHO: Kenji Ikemori founded Fancl in 1982. For over 35 years, Fancl has been a pioneer in the field of preservative-free, safe, reliable cosmetics, skincare, and supplements. They have adhered to three unchanging values to maintain the quality and freshness of their products: small bottles, hermetically sealed containers, and freshness-dated boxes.

Japan Brewery Co., Ltd. (the forerunner of Kirin Brewery Co., Ltd.) was established in 1885. Today Kirin Holdings Co., Ltd. is Japan’s second-biggest beer maker. The company’s portfolio includes beer and spirits, non-alcoholic beverages, and a pharmaceutical business.

WHY: The investment reduces exposure for Kirin in the shrinking domestic beer market and part of the company’s strategy of shedding underperforming overseas assets and expanding into health foods and beverages.

Kirin’s investment in Fancl, which is known for its preservative-free cosmetics and supplements, accelerates that shift and will, the two companies said, help expedite the development of new products.

IN THEIR OWN WORDS: “I wanted to hand over [Fancl] to a company I can entrust with the future while I’m still capable of making decisions,” Fancl’s founder and Chairman Kenji Ikemori said.

DETAILS:

• Japanese brewer Kirin Holdings Co., Ltd. acquired a 30.3% stake in cosmetics company Fancl Corp for 129 billion yen ($1.21 billion).
• Kirin will acquire shares from Fancl’s founder and Chairman Kenji Ikemori and his relatives.
• The stake represents 33% of the voting rights.
• Kirin will convert Fancl into an equity method affiliate after the purchase.
• Kirin will not hold veto power on special resolutions during shareholder votes since its ratio of outstanding Fancl shares owned will fall short of the one-third threshold, which enables Fancl to preserve a level of independence.
• Kirin, which has made progress in the preventive health field among consumers, is aiming for segment sales of US$940 million (100 billion yen) in 2027.
• Fancl’s sales reached  US$1.15 billion (122.5 billion yen) in fiscal 2018 with the nutritional supplement segment alone, which includes food items designed to prevent adult-onset diseases, generating roughly US$413.6 million (44 billion yen).
• The capital and business alliance will focus on jointly developing and producing health foods, drinks, and supplements.