Newspaper article International Herald Tribune

Suntory I.P.O. Could Be Asia's Largest This Year ; Parent Plans to Spin off Producer of Food and Nonalcoholic Beverages

Newspaper article International Herald Tribune

Suntory I.P.O. Could Be Asia's Largest This Year ; Parent Plans to Spin off Producer of Food and Nonalcoholic Beverages

Article excerpt

The Japanese company is said to have set a preliminary target of raising $4.8 billion by listing its food and soft drinks unit, as it seeks money to expand overseas.

Suntory Holdings got the nod Wednesday to list its food and soft drinks unit in Tokyo, paving the way for what is expected to be the biggest initial public offering in Asia so far this year.

Suntory Beverage & Food, the largest Japanese manufacturer of nonalcoholic drinks by sales, has set a preliminary target of raising about Yen 475 billion, or $4.8 billion, two people with direct knowledge of the offering said Wednesday.

If it raised that much, the deal would be the biggest I.P.O. in all of Asia this year and the second-biggest equity sale in the region, after Japan Tobacco's Yen 747 billion follow-up offering of shares in March.

Facing a saturated market at home, Suntory, which is based in Osaka, has been eager to raise money to bolster its presence overseas. In 2009, it bought the European beverage maker Orangina Schweppes for EUR 2.6 billion, or $3.4 billion at the current exchange rate, and followed up with the acquisition of Funcor Group, one of the largest beverage producers in New Zealand.

The offering is scheduled at an opportune time. Tokyo's stock market has surged almost 40 percent this year and about 65 percent in the past six months, thanks to optimism over the bold economic policies promised by Prime Minister Shinzo Abe.

Companies listed in Japan have raised a total of $18.6 billion through 70 new share sales so far this year, data from Thomson Reuters show. That is more than triple the $5.9 billion raised in 50 deals during the period last year. The figures include I.P.O.'s, follow-up offerings and convertible bond sales.

Suntory, a century-old company known for producing Japan's first whiskey -- the actor Bill Murray hawked it in fictitious advertising in the film "Lost in Translation" -- is one of Japan's largest privately held companies. …

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