Kirin Holdings, Japanese beverages firm, is in talks to invest $70 million in Indian craft beer maker Bira, quoting some sources news agency Reuters reported on Tuesday.
Kirin, which first invested $30 million in Bira for an under 10 per cent stake last year, is set to pump in the additional funds at an equity valuation of $450 million, the sources said. Negotiations between the Japanese firm and Bira’s owners are in the final stage, one of the sources privy to the development told Reuters..
The latest deal talks come as Japan’s major drinks makers are facing a steady decline in revenue from alcohol sales as the domestic population shrinks and younger people drink less than in previous decades, forcing the firms to expand overseas or foray into new markets.
Kirin’s plan for additional investment in Bira comes even as the Japanese yen has fallen to 24-year lows, which is set to raise the cost of overseas acquisitions for local companies.
According to the Reuters report, Kirin would have a total stake of nearly 15 per cent in Bira once the latest funding round closes, sources pointed out.
Bira, which started in 2015, is one of India’s most popular craft beer makers. It competes with global brands such as Carlsberg as well as Heineken-owned United Breweries in India’s estimated $5 billion beer market.
Japan-based financial company Mitsubishi UFJ Financial Group is also in talks for participating in the round with a $15 million investment, the sources added.
Bira CEO Ankur Jain declined to Reuters’ request for comment. Kirin and MUFG also declined to comment.
North America has been a focus area for Japanese drinks makers. Kirin owns a stake in New York’s Brooklyn Brewery, and its subsidiary owns US-based craft beer makers New Belgium Brewing and Bell’s Brewery.
The new planned Bira investment “is a small amount, but Kirin is bullish on India,” said the first source, adding that Keisuke Nishimura, a senior Kirin executive, visited India recently to assess the retail market and Bira’s breweries, and Bira’s CEO Jain in recent weeks visited Japan to meet the Kirin management.