Sapporo to sell real estate business for $2.6 billion to consortium led by KKR (NHK)

Japan’s Sapporo Holdings plans to sell its real estate business to a consortium led by private equity firm KKR for 400 billion yen ($2.6 billion), public broadcaster NHK reported Wednesday.

Sapporo, known for its beer brewing business, is seeking to focus its management resources on its core businesses and has “negotiated the price and terms with several investment funds and others,” NHK said, according to a Google translation of the Japanese article.

Sapporo’s real estate assets include Yebisu Garden Place in Tokyo, a popular tourist destination that includes the Yebisu Brewery as well as fine restaurants and boutiques.

The investment consortium includes KKR and Asia-based investment firm PAG, with NHK reporting that the PE buyout fund plans to increase real estate profits by attracting new tenants to Yebisu Garden Place.

A redevelopment of the place should also be considered in the future.

Sapporo, meanwhile, plans to use funds generated from the sale to invest in its brewing business and other areas to strengthen the core value of its business.

Sapporowhose shares gained 2.86% following the announcement, and KKR did not immediately respond to CNBC’s request for comment.

This is not Sapporo’s first attempt to hand over its real estate business to the consortium. Last October, Nikkei reported that the company granted preferential trading rights to KKR and PAG, only to subsequently end exclusive negotiations. next month.

The report said the two parties failed to agree on the sale price for the real estate business because properties in the portfolio “required significant and costly repairs due to aging facilities and the necessary implementation of safety measures.”

At that time, Sapporo had opened the sale to other buyers and reportedly contacted a consortium comprising private equity funds Lone Star Funds and real estate fund manager Kenedix.

Read the full NHK story here.