Mon, Feb 19, 2007 - Page 5 News List

Asahi willing to play white knight's role

BREWING CONTROVERSY The No. 1 beermaker in Japan said it's mulling buying Steel Partner's 18 percent stake in Sapporo, but the smaller firm said it wasn't interested

AP AND BLOOMBERG , TOKYO

Japan's No. 1 beer maker Asahi Breweries Ltd is considering a white-knight bid to block a US investment fund's takeover of a smaller rival, a major newspaper reported yesterday.

Asahi Breweries president Hitoshi Ogita said, "We will consider a possibility if there is a request for our support" from Sapporo Holdings Ltd, which faces a possible takeover by US fund Steel Partners Japan Strategic Fund LP, the Mainichi Shimbun reported.

"At present, we have no contact" with Sapporo, Ogita said in an interview with the newspaper.

The Nikkei newspapers also has a similar report.

Many Japanese food retailers have scrambled to beef up capital alliances with each other to try to become more competitive, but much of corporate Japan is still reluctant to embrace US-style management practices.

The Yomiuri Shimbun said Asahi Breweries is considering buying Steel Partners' entire 18 percent stake in Sapporo -- a step that would save Sapporo from the US fund controlled by US investor Warren Lichtenstein, while allowing Asahi to pursue a business tie-up as Sapporo's top shareholder.

Steel Partners had proposed to raise its stake in Sapporo to two-thirds, effectively taking over Japan's No. 3 brewer. The Mainichi said Ogita's comment was Asahi Breweries' first public statement indicating the possibility that his company may step forward to save Sapporo from the takeover.

But Sapporo Holdings said it won't ask one of its rival brewers to help by forming an alliance any time soon.

"There is no truth to the reports about those proposals," Sapporo spokesman Tatsuya Komatsu said in a telephone interview yesterday.

"At present, we have no plans to offer any tie-up proposals to any brewer," Komatsu said. "For now, we haven't changed our policy to go by ourselves."

Asahi and Sapporo, who compete with each other for market share, were created from the split of the same parent -- the former DaiNippon Beer Co -- in 1949.

Both breweries denied a separate newspaper report on Friday that they are discussing a business tie-up, though Sapporo later said the company is open to a friendly offer.

"Asahi had a tough time too. Sapporo is making profits, and we can do it if we make new, valuable suggestions," Ogita told the Mainichi Shimbun.

The newspaper, however, said Sapporo is also seeking other options, including a business tie-up with Japan's second biggest beer maker, Kirin Brewery Ltd.

But Komatsu denied the company was approached by Kirin, or was considering a tie-up with Kirin.

Officials at Asahi Breweries and Kirin Brewery could not be reached yesterday for comment.

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