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• Sapporo International Inc. acquiring 51% of the total shares of the biggest U.S. manufacturer of private-brand (PB) chilled beverages from the Toyota Tsusho Group

Sapporo International Inc. acquiring 51% of the total shares of the biggest U.S. manufacturer of private-brand (PB) chilled beverages from the Toyota Tsusho Group

2012-02-07

A stock purchase agreement was concluded between Sapporo International Inc. (hereinafter "Sapporo International") of the Sapporo Group and Toyota Tsusho America, Inc. (hereinafter "Toyota Tsusho America"), of the Toyota Tsusho Group, on January 31, 2012, to transfer 51% of the total issued shares in Silver Springs Citrus, Inc. ("SSC"), to Sapporo International from Toyota Tsusho America. SSC is the biggest U.S. manufacturer of PB chilled beverages and is wholly owned by Toyota Tsusho America. With the transfer of 51% of the total issued shares in SSC on the same day, Sapporo International will launch full-scale beverage businesses in the United States, where it already has established a competitive advantage as a top brand of Asian beer. Sapporo International and the Toyota Tsusho Group will expand SSC's beverage businesses, harnessing their strengths in the United States.

 

DESCRIPTION

 

1. Outline of the Stock Transfer

Under this stock purchase agreement, on January 31, 2012, Sapporo International had 51% of the total issued shares in SSC transferred from Toyota Tsusho America, thereby converting SSC to a subsidiary of the company. The purchase price was US$24 million (approximately \1,800 million*).

Date of conclusion of the stock purchase agreement: January 31, 2012 (Tuesday)

Date of the stock transfer                                         : January 31, 2012 (Tuesday)

*Calculated based on the conversion rate as of January 31, 2012, of $1.00 = \76.38

 

2. Reason for the Stock Transfer

The goal of the Sapporo Group stated in the "SAPPORO Group Management Plan 2011-2012", a two-year rolling plan with the "New Management Framework" covering the period until 2016, which will be the 140th anniversary of Sapporo Holdings, is to solidify the Group's growth trajectory. Under the management plan, Sapporo International aims to expand its business area from its Alcoholic Beverages (International) business to its overall international business, positioning both North America, as an operational base, and fast-growing Asia as priority areas. This stock purchase agreement provides Sapporo International with a business base for its beverage businesses in North America, where it has a competitive advantage in the Alcoholic Beverages business, thereby enabling Sapporo International to launch business expansion in North America.

SSC is the biggest U.S. manufacturer of PB chilled beverages with large-scale retail chains and major beverage manufacturers as its clients mainly in the United States and Canada. Since Toyota Tsusho America acquired 100% of SSC's shares in 1994, and with the introduction of "Toyota Production System" at SSC, the manufacturing efficiency of SSC has been improved. Through such aggressive business promotion, SSC's businesses have been growing steadily.

To help SSC grow, the Toyota Tsusho Group was contemplating further improving the product quality of SSC and reinforcing SSC's beverage manufacturing technology and product development capability. Such intention of the Toyota Tsusho Group met the management strategies of Sapporo International for business expansion in its international business, resulting in this stock transfer agreement.

This stock purchase agreement enables Sapporo International to accumulate the know-how and knowledge to establish a foundation for its beverage businesses in North America, where it already has an operational base for its Alcoholic Beverages business. In addition, by securing steady profit from SSC, Sapporo International aims to further grow its international business.

Leveraging this stock transfer agreement, Sapporo International and the Toyota Tsusho Group intend to reinforce SSC’s beverage business.

 

3. Overview of Silver Springs Citrus, Inc.

Company name	Silver Springs Citrus, Inc.
Location	25411 Mare Ave., Howey-in-the-Hills, Florida, USA (a suburb of Orlando, a city in the U.S. state of Florida)
Inception	1921
Capital	$32.5 million
Representative	John Rees, President
Number of employees	227 (as of December 2011)
Description of businesses	Manufacturing and sales of PB chilled beverages for major food supermarkets Commissioned manufacturing of chilled beverages for major beverage manufacturers
Outline of financial position	Fiscal year	Fiscal year ended September 2009	Fiscal year ended September 2010	Fiscal year ended September 2011
	Net sales	$132 million	$122 million	$118 million

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