Japanese drinks giant Kirin said Thursday it has agreed to a buyout of its shares in a Myanmar joint venture with a junta-linked conglomerate as it seeks to exit the market after the 2021 coup.
Days after the putsch in February last year, Kirin announced it would end its joint venture Myanmar Brewery with the junta-linked MEHPCL, saying it was “deeply concerned by the recent actions of the military in Myanmar.”
But it struggled to disentangle itself from the secretive conglomerate and contested a bid by MEHPCL to dissolve the joint venture as it feared liquidation proceedings would not be fair.
Kirin said Thursday it has agreed a share buyback worth about 22.4 billion yen ($164 million) to transfer its 51 percent stake back into the subsidiary, ending the joint venture.
The deal remains to be approved and a date for the share transfer has not yet been set.
“We are relieved to settle this matter within the announced deadline by the most appropriate means among several options,” Yoshinori Isozaki, Kirin’s president and CEO, said in a statement.
But activists said the decision to sell the shares in Myanmar Brewery and the smaller Mandalay Brewery back to the company effectively hands control and revenue to the junta.
Justice for Myanmar spokeswoman Yadanar Maung called the deal “a windfall for the Myanmar military”, warning it would “ensure a continued stream of revenue to finance atrocity crimes.”
“Kirin must reverse this deplorable decision or be held accountable for aiding and abetting the military’s ongoing international crimes,” she added.
According to figures published by Kirin in 2018, Myanmar Brewery – whose beverages include the ubiquitous Myanmar Beer brand – boasted a market share of nearly 80 percent.
Investors piled into Myanmar after the military relaxed its iron grip in 2011, paving the way for democratic reforms and economic liberalisation.
But a raft of foreign companies have exited the market since the military seized power from Aung San Suu Kyi’s government, including oil giants TotalEnergies and Chevron and Norwegian telecoms operator Telenor.
Kirin’s Myanmar business generated 32.6 billion yen ($240 million at today’s rates) in revenue in 2019-20, less than two percent of the firm’s annual sales.
The Japanese giant had been under pressure even before the coup over its ties to the military, and launched an investigation after rights groups called for transparency into whether money from its joint venture had funded rights abuses.
