Suntory’s F&B unit climbs 1.45% in Tokyo stock debut


Thu, Jul 04, 2013 - Page 15

Shares of Suntory’s food-and-beverage unit closed 1.45 percent higher on their Tokyo debut yesterday, after the Japanese drinks giant raised about US$3.9 billion in the world’s second-biggest initial public offering (IPO) this year.

The firm, which owns the Orangina brand and distributes a range of foreign products in Japan, including Pepsi and Jim Beam bourbon, spun off the lucrative unit as it eyes more foreign acquisitions.

The sale followed a string of overseas deals aimed at offsetting a shrinking market at home.

Suntory Beverage & Food closed at ¥3,145, up from its IPO price of ¥3,100. The relatively modest gains are more impressive given that the broader Nikkei index was down 0.31 percent.

The unit, which produces non-alcoholic drinks, last year reported sales of ¥992.1 billion (US$9.85 billion), or more than half of the Suntory group’s ¥1.85 trillion in revenue.

Some of the IPO proceeds will be used to pay off short-term bank loans, while the rest is earmarked for “strategic domestic and international investments aimed at growing the company,” the subsidiary has said.

The founding family of Osaka-based Suntory, which was established in 1899, retains a stake of nearly 90 percent. The firm is one of Japan’s biggest brewers and whisky makers.

The IPO is the largest in Tokyo since Japan Airlines’ US$8.5 billion offer last year. It is also the second-biggest this year globally after Brazil’s BB Seguridade Participacoes SA’s US$5 billion offering in April, according to data provider Dealogic.