Suntory Said to Plan Food and Drinks Unit IPO

Suntory Holdings Ltd., the closely held Japanese whiskey and beer maker, plans to sell shares of its non-alcoholic drinks and food business in Tokyo, two people familiar with the matter said.

The company is planning an initial public offering, which may take place next year and could be announced as early as next week, one of the people said, asking not to be identified because the matter isn’t public. Part of the proceeds will be used to finance mergers and acquisitions, the second person said.

Suntory may follow rivals Kirin Holdings Co. and Asahi Group Holdings Ltd. (2502), which have sought growth through overseas deals as a declining population damps domestic demand. Japanese companies led by Japan Airlines Co. (9201), have raised $11.54 billion from initial public offerings this year, a six-fold increase from 2011, data compiled by Bloomberg show.

Suntory declined to comment, Kenichiro Higashi, a spokesman for the Osaka-based company said by phone. The beverage maker plans to raise 500 billion yen ($6.1 billion) by selling shares of the beverage and food unit and listing on the Tokyo Stock Exchange next summer, Nikkei reported today, without saying where it got the information.

Overseas Deals

The unit, Suntory Beverage & Food Ltd., had 970.6 billion yen in sales for the year ended December 2011 while parent Suntory Holdings had 1.8 trillion yen, according to a company statement. The business had about 15,000 employees as of December 2011, according to the company website.

Suntory has focused overseas acquisitions on non-alcohol beverages over the past five years. The company bought France- based Orangina Schweppes Group in 2009 for an undisclosed sum and paid 600 million euros in 2009 for New Zealand’s Frucor Beverages Group Ltd.

Suntory had 225 billion yen of cash and savings as of the end of June, according to a company statement.

JAL’s September IPO raised $8.4 billion, the data compiled by Bloomberg show.

To contact the reporters on this story: Yuki Yamaguchi in Tokyo at yyamaguchi10@bloomberg.net; Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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