Kirin's $1.9 billion Blackmores takeover gets green light from regulators

Kirin's $1.9 billion Blackmores takeover gets green light from regulators

Marcus Blackmore, the largest shareholder of Blackmores and son of founder Maurice Blackmore. Marcus stepped down from the board in 2020 after driving the company's global expansion and its ASX listing in 1985.

Japanese beverages giant Kirin has passed two major regulatory hurdles for its $1.88 bitllion takeover of Sydney-based vitamins company Blackmores (ASX: BKL), paving the way for a shareholder vote to go ahead for the scheme on 18 July.

Blackmores announced after yesterday's market close that Kirin has received written confirmation from Australia's Foreign Investment Review Board (FIRB) that the Commonwealth Government has no objection to the deal, while China's State Administration for Market Regulation (SAMR) has also given a green light to the acquisition.

China is Blackmores' largest market outside of Australasia, bringing in $93.7 million revenue in the second half which is equivalent to more than a quarter of total sales and on par with the group's combined international sales for the rest of the world.

The news comes as Kirin-owned subsidiary Lion has acquired the remaining stake in award-winning gin distillery Four Pillars

The board unanimously recommends shareholders vote in favour of the takeover in two weeks' time, provided there is no superior proposal and an independent expert continues to conclude it is in the best interests of all shareholders.

The takeover would represent a departure from 90 years of family business for Blackmores since it was founded in the early 1930s by naturopath Maurice Blackmore with a health food store in Brisbane.

Maurice's son Marcus Blackmore took the reins after his father's retirement in the 1970s, and in 1985 the company listed on the Australian Stock Exchange (ASX: ASX). Since then it has grown to reach 13 global markets with revenue of $649.5 million in FY22 and employs more than 1,200 staff.

In last year's annual report shareholder register, Marcus Blackmore was listed as having a 10.98 per cent stake in the group.

After reporting a slight dip in sales for the December half, which ran counter to strong performance in Australia, New Zealand and China but was offset by poor performance in the international segment, weighed down by lower sales in Indonesia and Malaysia.

In its half-yearly report the company also noted it was on track to achieving $55 million in annualised gross cost savings by the end of FY23, of which $6 million were delivered in the December half. Between FY24 and FY26 Blackmores is targeting a further $34-44 million in additional annualised cost savings.

"Our teams have continued their disciplined focus on execution with improved customer service levels and continued new product and brand innovation which drove market share and distribution gains across our core geographies," CEO Alastair Symington said when the results were announced in February.

"While the near-term operating environment remains somewhat uncertain with continuing themes of cost inflation and rising interest rates impacting consumer sentiment and behaviour, we remain focused on executing our strategic and commercial plans and leveraging the group’s channel and geographic diversity."

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