Japan's Suntory to list key unit in US$4.7b IPO
2013-05-29 17:32:16
Japanese drinks giant Suntory said Wednesday it will list its food-and-beverage unit in a $4.7 billion offering that could mark the year's biggest share sale on the booming Tokyo Stock Exchange.
About 125 million new and existing shares would be sold in the privately-held company's Suntory Beverage & Food unit, an initial public offering valued at 475.76 billion yen, based on an expected sale price of 3,800 yen per share, it said.
Shares of the unit, which produces non-alcoholic beverages including soft drinks and bottled tea, would be listed on Japan's premier bourse on July 3, it said.
The division's sales last year totalled 992.1 billion yen, or more than half of the Suntory group's 1.85 trillion yen in revenue.
Suntory, which three years ago scrapped plans to merge with Japanese beverage giant Kirin to create one of the world's largest beer and soft-drink companies, has announced a number of overseas acquisitions as part of its bid to offset a shrinking domestic market.
Its well-known print advertisements and television commercials have featured the likes of American actors Leonardo DiCaprio and Tommy Lee Jones.
The listing "should help the firm's business expansion and boost its value by letting it make decisions quickly in the fast-changing global beverage market," Suntory said in a statement.
The spin-off would make the unit a "self-sustaining global company", Suntory said, adding that it would respect "the independence of the company and its ability to manage itself".
In a separate press release, the food and beverage unit said some of the IPO proceeds would be used to pay off short-term bank loans.
"As for the rest, we plan to allocate it for strategic domestic and international investments aimed at growing the company," it said.
The company's founding family, which established the company in 1899, retains a stake of nearly 90 percent in Osaka-based Suntory Holdings. The parent company has long been known for its whiskey and beer offerings, but it has been expanding into the food and beverage sector.
Suntory Holdings and its alchoholic beverage unit would remain privately held, according to reports earlier Wednesday.
Major Japanese beverage makers have aggressively sought to expand abroad in recent years to offset their shrinking domestic market, while a strong yen made the foreign shopping spree relatively cheaper.
Suntory said last year it would form a joint venture with Chinese brewer Tsingtao to expand its reach in the world's biggest beer market.
It has also said it would acquire a 51-percent stake in Indian food and drink maker Narang Group and set up a joint venture. In 2009 it bought Europe's Orangina Schweppes Group for about $3.3 billion.
The proposed Kirin-Suntory merger fell apart in 2010 with Kirin, Japan's top brewer, saying the two firms disagreed over whether the merged company would be publicly listed, while Suntory cited discord over how control would be split between the long-time rivals.