Japan’s Suntory Plans Initial Share Sale of Beverage Unit

Suntory Holdings Ltd., the closely held Japanese whiskey and beer maker, is planning an initial public offering of its non-alcoholic beverage unit in Tokyo and will set up a division within the subsidiary to explore deals.

The company will list Suntory Beverage & Food Ltd. on the Tokyo Stock Exchange, it said in an e-mailed statement today, without providing a time frame or size of the offering. The unit will set up a department for mergers and acquisitions starting Jan. 1, according to the statement.

Suntory, along with rivals Kirin Holdings Co. (2503) and Asahi Group Holdings Ltd. (2502), has sought growth overseas as a declining population damps domestic demand. The Osaka-based company has focused overseas acquisitions on non-alcohol beverages in the past five years, buying Orangina Schweppes Group of France and New Zealand’s Frucor Beverages Group Ltd. in 2009.

The subsidiary aims to have sales of 2 trillion yen ($24 billion) by 2020, according to today’s statement. The unit had 970.6 billion yen in sales for the year ended December 2011, while parent Suntory Holdings generated 1.8 trillion yen.

To contact the reporter on this story: Yuki Yamaguchi in Tokyo at yyamaguchi10@bloomberg.net

To contact the editor responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net