Mitsubishi to acquire ingredients firm Kirin Kyowa Foods

Japanese trading firm Mitsubishi has entered into an agreement with Kirin Holdings to acquire its food flavours manufacturing subsidiary, Kirin Kyowa Foods (KKF), in a deal estimated to be worth JPY30.5bn ($321m).

Under the terms of the deal, Mitsubishi will purchase an 81% stake in KKF in July this year and the remaining share in January 2015.

The acquisition is part of Mitsubishi’s strategy to expand its presence in consumer businesses, increase its value proposition, and provide the global food processing industry with scaled up food flavouring solutions.

Kirin Kyowa Foods produces a variety of ingredients and flavour enhancing products, including yeast extracts, nucleotides and hydrolyzed proteins, and has operations in Japan, Indonesia and China.

It also manufactures and sells seasonings, sweeteners, quality-enhancing agents, bakery ingredients, and processing liquours.

Mitsubishi stated that the worldwide market for food ingredients and flavouring products is estimated to be valued at $120bn and this market continues to grow, driven by rapid economic expansion in China and other Asian countries.

As the global market expands, the natural flavours market has reached $10bn and particularly the demand for products such as yeast extracts is increasing significantly, it added.

In November 2012, Mitsubishi established its wholly owned subsidiary Mitsubishi Corporation Life Sciences (MCLS) to leverage its strengths in the science and the food technology.

MCLS had combined two existing subsidiaries – Mitsubishi Shoji Foodtech, which specialises in sweeteners and seasonings, and KOHJIN Life Sciences, which specialises in fermentation technology.

Mitsubishi plans to add KKF to MCLS as a core entity, in order to allow integration of food innovation capabilities and technical expertise.