TOKYO (

TheStreet

) --

Kirin Holdings

(KNBWY.PK) said Friday it will acquire liquor manufacturer

Mercian

as its wholly owned subsidiary.

Kirin, Japan's top alcohol and soft beverage maker, said it will pay 11.1 billion yen, or $131.5 million at current exchange rate, in a stock-swap deal to acquire the 49.9% of Mercian it did not already own.

Under the terms of the deal, Kirin will pay 0.14 of its shares for each share of Mercian's. The deal is expected to become effective Dec. 1.

Pink sheet-traded shares of Kirin fell 0.8% Friday to $13.87.

Kirin picked up a 50.1% stake in Mercian in 2006 as part of its ongoing effort to expand and diversify its portfolio as demand for beer in Japan weakened.

Earlier this month Kirin downwardly revised its profit forecast for 2010 by 27% to account for a 6.5 billion yen, or $77 million, loss on Mercian's books.

Mercian booked the loss after announcing in May it had artificially inflated its profits over the course of several years.

Merger and acquisition action is no stranger to the international beer market.

Rumors have been circulating for some time that

Anheuser-Busch Inbev

(BUD) - Get Report

is angling to acquire to

Craft Brewers Alliance

(HOOK) - Get Report

.

>> Anheuser-Busch Thirsty for Craft Brewers, Poll Says

Earlier this week U.K.-based

SABMiller

(SBMRY.PK) and Japan's

Asahi Breweries

(ASBRY.PK) were reportedly considering a

takeover of the beer operations of Australia's Foster's

(FBRWF.PK).

>>Foster's Brews Up Takeover Talk

Asahi, Japan's second-largest beermaker, said Thursday it would acquire

P&N Beverages

, a soft drink maker based in Australia, for A$364 million ($322.7 million) in cash.

The Japanese beer market has contracted 16% since its peak in 1994, according to

Bloomberg

.

-- Written by Miriam Marcus Reimer in New York.

>To contact the writer of this article, click here:

Miriam Reimer

.

>To follow the writer on Twitter, go to

http://twitter.com/miriamsmarket

.

>To submit a news tip, send an email to:

tips@thestreet.com

.

RELATED STORIES:

>> Anheuser-Busch Thirsty for Craft Brewers, Poll Says

>>Foster's Brews Up Takeover Talk

>>Anheuser-Busch Takeover Target: Craft Brewers Alliance?

>>Castle Brands Hit by ForEx Hangover

>>Boston Beer: High Volume Movers

>>See our new stock quote page.

Get more stock ideas and investing advice on our sister site,

Stockpickr.com.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.