Japanese brewer Kirin Holdings has agreed to buy Australian vitamin maker Blackmores for US$1.2bn in cash as part of its strategy to diversify its revenue streams. Kirin is expanding its healthcare and pharmaceuticals business to move away from its domestic beer market, which has shrunk by a third from its peak in 1994.

Founded in the 1930s, Blackmores is a well-known brand in alternative healthcare in Australia. Marcus Blackmore, the son of the company's founder and its largest shareholder, along with the Board, has approved Kirin's takeover bid for the company at AUD95 per share and recommended that shareholders vote in favour of the proposal at the AGM likely to be held in July. The offer represents a premium of almost 24% to Wednesday's closing share price.

In 2022, Kirin unveiled a three-year business strategy to increase investment in R&D and expand its presence in the health sciences sector. The acquisition of Blackmores is considered advantageous for Kirin as it will give it access to markets in China and Southeast Asia where it is not as strongly represented. Kirin expects its health sciences division to generate annual revenues of JPY200bn (USD1.5bn) and an operating margin of 15% by 2027, but the division only generated JPY103bn in revenues and suffered an operating loss of JPY7.1bn in the previous year.

The acquisition of Blackmores marks the second largest acquisition of an Australian consumer company this year, following the recent $2.5 billion acquisition of luxury soap maker Aesop by L'Oreal. Kirin's previous major acquisition in Australia was in 2009, when it bought the Lion Nathan brewery, which produces well-known Australian beers such as XXXX and Tooheys, for AUD6.5 billion.