Sapporo Holdings under pressure from activist investors plans to divest its property holdings and to refocus its activities around the core activities, according to Reuters.
The activist investor, 3D Investment Partners based in Singapore, has incrementally increased its stake in Sapporo over recent months, emerging as the largest single shareholder with a 16% stake. The company has criticized Sapporo for excessively focusing on its real estate ventures that has no direct connections to the beer business.
Sapporo Real Estate possesses commercial complexes and rental properties located in the prestigious areas of Ebisu and Ginza in Tokyo, as well as in Sapporo.
Sapporo Holdings operates three primary divisions, alcoholic beverages, real estate, and food and soft drinks. The alcoholic beverages segment is characterized by low profitability, which has led the company to spend more money in other areas, thus neglecting its core business. Therefore the company is contemplating restructuring measures. These may involve divesting real estate assets and seeking external investment for its subsidiary, Sapporo Real Estate, reported Nikkei Asia.
The company's president Masaki Oga, 65, who has helmed Sapporo since 2017, acknowledged the concerns raised by 3D and others, emphasizing the need for Sapporo to realign its focus on beer and enhance corporate value.
However, Oga refrained from specifying the timing or details of the transformation but said he aims to unveil the business portfolio reorganization "as soon as possible”.
"Incomplete announcements would not serve the interests of external stakeholders or the company itself," he said in an interview on Monday. "If a certain aspect has been clearly decided, we may choose to announce that independently."
Alongside its full-year results last week, Sapporo outlined a growth plan acknowledging that its current array of businesses has led to "scattered resources and intra-group competition issues."
With its domestic beer business unlikely to see significant growth due to Japan's declining population, the company intends to actively explore mergers and acquisitions overseas.
Oga noted that North America and Asia are the most promising regions due to their market size and the company's familiarity with them. He emphasized that the primary objective would be to expand the flagship Sapporo brand, recognized abroad for its iconic tall, silver can.
The company has had a mixed track record managing other brands. Its acquisition of San Francisco's Anchor Brewing for USD 85 million in 2017 ended with the closure of the 127-year-old company last year (inside.beer, 11.07.2023).
