Japanese drinks company Kirin Holdings will sell its stake in a Myanmar joint venture with a military-linked local partner, it said, exiting the Southeast Asian country more than a year after the military toppled an elected government.
Kirin's 51% stake in Myanmar Brewery Limited will be sold back to the brewery for 22.4 billion yen ($164 million), it said in a statement, ending its partnership with brewery parent company Myanma Economic Holdings Public Company Limited (MEHL).
The deal draws to a close the Japanese drink giant's more than year-long wrangling with its partner over the business. Kirin executives initially said they wanted to remain in the market somehow, but after a year of negotiations the two sides agreed in February to terminate the venture.
The brewer said on Thursday it had also considered transferring its stake to a third party or liquidating the business but decided not to pursue either of those options.
Transferring the stake would require a 'lengthy process' at odds with its goal of exiting as soon as possible, it said, while liquidation would have 'tremendous impact' on Myanmar employees, partners and the community, it said.
Rights group Justice for Myanmar criticised the sale as a "windfall for the Myanmar military" that would ensure the junta a steady stream of revenue.
"Kirin appears to be excusing this irresponsible exit by claiming it is in the best interests of workers," Justice for Myanmar spokesperson Yadanar Maung said.
"The responsible move is to deny funds to the military and remedy negative impacts to workers through compensation."
MEHL, set up in 1990 soon after the army crushed a pro-democracy uprising, is one of two vast holding companies run by the military.
The United States imposed sanctions on both - the other one is the Myanmar Economic Corporation - after the military seized power on 1 February last year, ousting a government led by Nobel Peace Prize laureate Aung San Suu Kyi.
Kirin said it would book 19 billion yen ($140 million) in operating income related to the sale. It previously booked a loss of 46.6 billion yen ($342 million) in the year that ended in December related to its exit from the business.
The sale will include another joint venture with MEHL, Mandalay Brewery Limited. The impact from that on Kirin is minimal, it said.
In March, Japanese energy company Eneos Holdings said it aimed to exit the Yetagun gas project in response to 'social issues', following criticism the project was funding the junta.