Despite initially expecting the public offering of Suntory Beverage & Food to attract as much as $4.7 billion, Japan's Suntory Holdings has said that it will raise $4 billion, or 388 billion Yen, from the listing of its food and soft drinks unit next week on the Tokyo Stock Exchange (TSE).
Although the IPO is still set to be the biggest in Asia this year, analysts noted that the initial public offering had been regarded as too high by investors, who have grown cautious amid recent volatility in Japanese markets.
Suntory stated in May that some of the proceeds from the IPO would be used to pay back bank loans, with the company planning to allocate the rest for 'strategic domestic and international investments aimed at growing the company'. 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', the company added.
Japanese drinks makers such as Suntory have begun a strategy of aggressive entry into new and Asian markets to offset declining beverage sales in Japan. In 2012, Suntory announced that it would establish a joint venture with Chinese brewing giant Tsingtao and is also purchasing a majority stake in Indian food and drink maker Narang Group. In 2009, Suntory bought the Orangina Schweppes Group for $3.3 billion.
Shares in Suntory BF are due to begin trading on the Tokyo Stock Exchange (TSE) on 3 July. (24 June)
© 2013 - ESM: European Supermarket Magazine by Ellen Lunney
