According to the sources Japanese beverage company Kirin Holdings plans to invest $70 million in Indian craft beer manufacturer Bira, doubling in on the rapidly growing South Asian market at a time when it is under pressure to maintain growth at home.
Sources further added, Kirin, which made its first $30 million investment in Bira for a stake of less than 10 per cent last year, plans to inject further capital at an equity valuation of $450 million. According to the the sources, negotiations between the Japanese business and the owners of Bira are nearing their conclusion.
The most recent negotiations take place as Japan's main beverage manufacturers struggle with a gradual reduction in alcohol sales revenue as the local population shrinks and younger people drink less than in previous decades, requiring the businesses to grow internationally or enter new markets.
The Japanese yen has plunged to 24-year lows, which is expected to increase the cost of international acquisitions for local businesses. Despite this, Kirin still plans to increase its investment in Bira.
Mitsubishi UFJ Financial Group, a financial institution based in Japan, is also in discussions to invest $15 million in the round, mentioned by a source.
For Japanese drink manufacturers, North America has been a key market. The American craft beer producers New Belgium Brewing and Bell's Brewery are owned by Kirin's subsidiary, along with a portion of the Brooklyn Brewery in New York. Asahi and Suntory, rivals, are attempting to penetrate the North American beverage market.
Craft beer sales are on the rise in India as younger, affluent consumers in big cities choose brands and pubs that make lighter brews and promise fresher ingredients. Bira claims that its beer is sold in 500 towns and cities in 15 nations and is produced in five breweries in India.
Sources claimed that Bira planned to open new breweries and introduce new goods including ciders with the money raised in the most recent round.