By Jenniffer B. Austria

Kirin Holdings Co., Japan?s second-largest brewer, will make a tender offer to acquire the remaining 5.75 percent shares owned by small investors in San Miguel Brewery Inc., the beer unit of San Miguel Corp.

?The percentage of ownership of Kirin in San Miguel Brewery will depend on the number of San Miguel Brewery shares which the public will tender to Kirin,? the company said in a disclosure.

San Miguel and Kirin last week said they signed a share purchase agreement, in which the Japanese brewer will acquire a 43.25 percent stake in San Miguel Brewery for P58.9 billion.

Kirin will purchase San Miguel?s 6.665 billion shares in the beer unit at a price of P8.841 per share. San Miguel will end up owning 7.85 billion San Miguel Brewery shares equivalent to 51 percent after Kirin?s acquisition. Payment will be made in cash in one or two tranches.

San Miguel will use proceeds from the sale to pay debts and fund new acquisitions.

San Miguel and Kirin expect to close the transaction by the end of May.

The agreement includes the completion of a tender offer by Kirin and the sale of San Miguel?s domestic beer brands, related intellectual property rights and technology to San Miguel Brewery for P32 billion.

The agreement also requires San Miguel, Kirin and San Miguel Brewery to negotiate exclusively the purchase of San Miguel?s overseas beer business.

?The exclusivity period is for six months following San Miguel?s offer to sell the shares in its overseas beer business,? San Miguel said.

San Miguel?s international beer group operates a brewery each in Indonesia, Vietnam and Thailand and two in China.

San Miguel Brewery produces and markets San Miguel Pale Pilsen, Red Horse, San Mig Light and five other affiliated brands. The group?s flagship product San Miguel Beer is among the world?s largest-selling beers and among the top three brands in Southeast Asia.

Kirin has been a strategic equity partner of San Miguel since 2002. Through its acquisition of a significant stake San Miguel Brewery, Kirin and San Miguel plan to reinforce their strategic relationship in the regional beer business and accelerate the creation of synergies between the two companies.

The Kirin Group aims to be a leading company in Asia and Oceania.