June 18, 2024 

TOKYO, Japan

Kirin Holdings Company, Limited (Kirin Holdings) has decided to acquire additional shares of common stock of FANCL Corporation (FANCL) through a tender offer and share warrants under the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended) with to make FANCL a wholly-owned subsidiary.

• Background ​

Under the long-term management vision Kirin Group Vision 2027, Kirin Holdings aims to “become a global leader in CSV by creating value in domains ranging from food & beverages to pharmaceuticals” by launching businesses in the health science field in addition to the food and pharmaceuticals fields, and by turning consumer health issues into growth opportunities. Through its research and development capabilities in fermentation and biotechnology as well as immunology, Kirin Holdings has strengthened its health science business to develop it into a business unit that will be responsible for the long-term growth of the Kirin Group. In 2019, Kirin Holdings acquired approximately 33% of FANCL’s shares (based on voting rights) and entered into a capital and business alliance agreement. In 2023, Kirin Holdings acquired Blackmores Limited (Blackmores), an Australian company that operates a health food (natural health) business in the Asia-Pacific region, thereby gaining a solid business foundation in overseas markets.

Under the FANCL Group VISION2030, FANCL aims to make the world healthier and more beautiful while becoming a company that is loved around the world. By responding to changes in the social environment through measures such as resolving new issues created by COVID-19, FANCL has strengthened its ties with consumers and reinforced its foundation for sustainable growth. Going forward, FANCL aims to further solidify its domestic operating base and aggressively invest the cash generated in Japan in FANCL’s overseas operations to develop them into growth drivers.

Backed by the same philosophy and direction of aiming for their own growth through solving social issues of health, Kirin Holdings and FANCL have deepened mutual understanding through the exchange of human capital since the conclusion of the capital and business alliance agreement in 2019. In addition, while experiencing changes in the external environment together, such as COVID-19, both companies have collaborated in the areas of materials, product and brand development, joint research and business development, and mutual use of infrastructure.

• Purpose of making FANCL a wholly-owned subsidiary

Kirin Holdings’ strengths include its long-standing immunology research, its ability to develop and manufacture high value-added ingredients through fermentation and biotechnology, and its health food business base in Asia-Pacific, which it acquired through the Blackmores acquisition.

FANCL‘s strengths lie in its ability to connect with and understand consumers through its D2C channels (online and directly-managed store sales), which account for 70% of sales, and in its technology for commercializing products by utilizing consumer feedback in research and development, in order to eliminate the “negatives” with a sense of justice, which it has consistently pursued since its establishment.

With FANCL as a wholly-owned subsidiary, Kirin Holdings will accelerate the creation of a competitive business model by mutually complementing each company’s unique strengths through the mutual utilization of management resources and the promotion of integrated management. By commercializing ingredients created through the natural technology of fermentation, leveraging customer understanding gained from Kirin Holdings’ and FANCL’s strong relationships with consumers, and delivering them to consumers through multiple channels in the Asia-Pacific region, the Kirin Group will contribute to solving consumers’ health issues in both the cosmetics and health food businesses and further enhance its presence in the global market in addition to Japan.

The conversion of FANCL into a wholly-owned subsidiary is expected to generate a variety of capabilities that far exceed the current framework of the capital and business alliance, such as strengthening mutual utilization of operating bases and purchasing data in Japan and overseas, deepening joint research, and horizontal deployment of environmental technologies. As a core operating company of the Kirin Group’s health science business, FANCL will further enhance the “FANCL-ness” of its brand without changing its founding philosophy, which is the source of its strength. In addition to maximizing FANCL’s corporate value, the two companies will work closely together to promote the business in order to grow it into one of the largest health science businesses in the Asia-Pacific region, thereby achieving growth for the Kirin Group as a whole and further enhancing corporate value.

• Outline of the Transaction