KKR & Co. and PAG have entered exclusive talks to acquire the real estate holdings of Sapporo Holdings in a deal valued at more than ¥400bn ($2.6bn), according to Bloomberg.

The Japanese brewer selected the KKR-PAG consortium as its preferred bidder and aims to reach a definitive agreement by November. However, negotiations remain ongoing, and the transaction is yet to be finalised.

Sapporo’s portfolio includes Yebisu Garden Place, an 83,000-square-metre landmark complex in Tokyo comprising offices, retail, and dining facilities.

Sapporo said in a statement that no specific decisions have been made regarding its real estate business and that it expects to complete its strategic review by year-end.

The company’s shares rose 5.7% in Tokyo trading following the news, hitting their highest level since May.

The move follows months of pressure from activist investor 3D Investment Partners, which has called on Sapporo to divest its non-core assets and focus on its alcoholic beverage business. The brewer appointed Nomura Holdings last year to advise on the sale.

The deal, if completed, would mark one of Japan’s largest real estate transactions of the year and strengthen KKR and PAG’s presence in the country’s property investment market.

Neither KKR nor PAG commented on the ongoing discussions.

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