Japan's Sapporo Holdings to sell real estate business in $3 billion deal with KKR and PAG
The move is because Sapporo wants to concentrate management resources on its core beer business.
Aliver
Cans of the Sapporo Black Label branded beer sit stacked at the Sapporo Breweries Ltd. factory in Eniwa, Hokkaido, Japan.
Tomohiro Ohsumi | Bloomberg | Getty Images
Japan's Sapporo Holdings will sell its real estate business to global private equity firm KKR and Asia-based alternative investment firm PAG, the companies said in joint statement on Wednesday.
Sapporo said the enterprise value of the deal, which includes debt, was 477 billion yen (about $3 billion).
The company's real estate holdings include the Yebisu Garden Place in Tokyo, a popular tourist destination that consists of the Yebisu Brewery as well as fine dining and shopping options.
Known for its beer brewing business, Sapporo is looking to concentrate management resources on its core operations, and plans to use the funds generated from the sale to invest in its beer business and other areas.
"Sapporo Holdings will focus on and further strengthen its alcoholic beverages business, where it has competitive advantages," the statement said. Proceeds from the sale will also be reinvested into initiatives to strengthen customer touchpoints and expand offerings such as healthier beverage choices
The company's shares closed 3.7% higher following the announcement, while KKR stock was slightly lower in after-hours trading.
"We are pleased to collaborate with PAG to support the Company's next stage of growth, and look forward to sharing our global network, investment experience and deep operational expertise in development, operations, and hospitality across KKR's global platform," said Hiro Hirano, CEO of KKR Japan.
Back in October, Nikkei reported that the company had granted preferential negotiating rights to KKR and PAG, only to end exclusive talks the next month.
The report said the two sides were unable to agree on the sale price of the real estate business, as the properties in the portfolio "required significant and costly repairs due to aging facilities and the necessary implementation of safety measures."
At that time, Sapporo had opened the sale to other buyers and was reportedly approaching a consortium made up of private equity funds Lone Star Funds and real estate fund manager Kenedix.
