Japanese beer company Kirin Holdings has agreed to acquire 100% of homegrown Aussie vitamin and supplements company Blackmores (ASX: BKL). Under the terms of the scheme, Blackmores’s shareholders will receive a cash consideration of $95 per Blackmores share, less any special dividend declared or paid prior to implementation of the scheme.

Blackmores’ largest shareholder, Marcus Blackmore, who holds or controls approximately 18% of Blackmores’ ordinary shares, has informed Blackmores that he has agreed with Kirin to vote 3,516,834 Blackmores shares held or controlled by him in favour of the scheme unless otherwise directed by Kirin.

Blackmores CEO and Managing Director, Alastair Symington, said: “Today is an important day in the history of Blackmores. The Kirin proposal recognises the strong leadership position that Blackmores, through its brands and people, has established in the natural health sector across the Asia Pacific region over our long history.

“Importantly it also confirms the significant opportunity that lies ahead for our employees and other key stakeholders of Blackmores as both companies come together to combine their focus on growing Kirin’s health science business across the world.”

Kirin is a beer company headquartered in Tokyo and listed on the Tokyo Stock Exchange with a market capitalisation of A$22.9 billion, is more than just a beer company. Kirin is also a leading Food and Beverage, Pharmaceuticals and Health Science company, and has increased its focus on health-related products in recent years. Blackmores’ Board of Directors unanimously recommend that Blackmores shareholders vote in favour of the scheme, subject to an Independent Expert concluding that the scheme is in the best interests of Blackmores shareholders.

The scheme is subject to certain conditions, including informal clearance by the Australian Competition and Consumer Commission (ACCC), and approval by the Australian Foreign Investment Review Board (FIRB), and the State Administration for Market Regulation (SAMR) of the People’s Republic of China. If the scheme becomes effective, the Blackmores Board intends to declare a fully-franked special dividend of $3.34 per Blackmores share (subject to availability of franking credits) payable on or immediately prior to implementation of the scheme.

Kirin President and Chief Executive Officer, Yoshinori Isozaki, commented that “Blackmores presents an exciting opportunity to transform the scale and reach of our Health Science domain. Kirin Group is working to create social value and economic value by solving social issues through our business activities, and we have been transforming our business from a brewing business to the business model creating value across Food & Beverages and Pharmaceuticals domains, based on the concept of “CSV” (Creating Shared Value).” 

The offer for the scheme is 23.7% higher than the previous closing price, 30.5% higher than the average price for the past month until April 6, 2023, and has an estimated acquisition multiple of 23.1 times the EBITDA as of December 2022.

Barrenjoey Capital Partners and Adara Partners are acting as joint financial advisers, and Herbert Smith Freehills is acting as legal adviser to Blackmores in relation to the sale. The deal is expected to close in the September 2023 quarter, subject to regulatory approvals.