Sapporo Real Estate Holdings to Sell to KKR, PAG

Japanese giant Sapporo Holdings is selling off its real estate business.

The holding company known for the popular Sapporo beer will sell its real estate arm to international private equity firm KKR and Asia-based alternative investment firm PAG, CNBC reported. The enterprise value of the deal, including debt, is about 477 billion yen, or nearly $3.1 billion.

Sapporo is shedding its real estate holdings to focus more of its resources on core operations. Proceeds from the sale will be invested in its beer business and other endeavors, such as initiatives to improve various customer touchpoints and to grow its offerings, such as healthier drink options. “Sapporo Holdings will focus on and further strengthen its alcoholic beverages business, where it has competitive advantages,” the company said in a statement.

News first broke over the summer that Sapporo was looking to sell off its real estate business. The groups vying for control at the time included Lone Star Funds and Kenedix; Bain Capital and Tokyu Fudosan; and KKR, PAG and Nomura Real Estate. The expected sale price was about 400 billion yen, or $2.7 billion, Reuters previously reported.

In October, Nikkei reported that Sapporo Holdings granted preferential negotiating rights to KKR and PAG. The deal fell apart the following month after the two sides purportedly could not agree on a sale price of the real estate business because the properties in Sapporo’s portfolio needed significant and costly repairs to its aging facilities. As a result, Sapporo opened the sale to other buyers and was reportedly nearing a deal with private equity fund Lone Star Funds and real estate fund manager Kenedix before ultimately settling on KKR and PAG.

Properties under Sapporo’s belt include the Yebisu Garden Palace in Tokyo, which attracts tourists for its Yebisu Brewery and restaurant and shopping offerings.

— Chris Malone Méndez