Japanese beverage giant Kirin said Thursday it has agreed to buy out its stake in a joint venture in Myanmar with a junta-linked conglomerate, completing its exit from the market following the 2021 coup.
Days after the February 2021 coup, Kirin announced it would end its joint venture Myanmar Brewery with the junta-affiliated MEHPCL, saying it was “deeply concerned by recent actions by the military in Myanmar”.
But it struggled to break away from the secretive conglomerate, challenging an offer by MEHPCL to wind up the joint venture, fearing a liquidation process would not be fair.
Kirin said Thursday that a share repurchase agreement worth about 22.4 billion yen ($164 billion) had been reached to transfer its 51 percent stake back to the subsidiary and end the joint venture.
“We are relieved to resolve this matter within the announced timeline through the most appropriate means among multiple options,” said Yoshinori Isozaki, Kirin President and CEO, in a statement.
According to figures released by Kirin in 2018, Myanmar Brewery – whose drinks include the ubiquitous Myanmar Beer brand – had a nearly 80 percent market share.
But Kirin was under pressure for his military ties even before the coup, and launched an investigation after human rights groups demanded transparency about whether funds from his joint venture had funded rights abuses.
After the military relaxed its iron grip in 2011, investors flocked to Myanmar, paving the way for democratic reforms and economic liberalization.
They poured money into telecoms, infrastructure, manufacturing and construction projects – before the coup turned the democratic interlude on its head and damaged the economy.
But a number of foreign companies have exited the market since the military took power from Aung San Suu Kyi’s government, including oil giants TotalEnergies and Chevron, and Norwegian telecoms operator Telenor.
Kirin’s business in Myanmar generated sales of 32.6 billion yen ($240 million at today’s exchange rates) in 2019-20, less than 2 percent of the company’s annual sales.
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