Suntory Considering an IPO and Other Financing Options, President Says
October 22 2015 - 7:50AM
Dow Jones News
TOKYO—The president of Suntory Holdings Ltd., Takeshi Niinami,
said Thursday that the company was considering an initial public
offering as one of a range of financing options aimed at helping
the company keep pace with a consolidating global beverage
industry.
Mr. Niinami said Anheuser-Busch InBev NV's planned takeover of
SABMiller PLC "stimulated thinking" in the industry, in which
Suntory last year signaled its intention of becoming a leading
player through its $13.6 billion purchase of the maker of Jim Beam
bourbon.
Mr. Niinami, who joined privately-held Suntory last year as its
first president from outside the founding family, said the company
would consider selling shares in the parent company or its
distilled spirits unit, now called Beam Suntory.
"I should not rule out listing either one," he said in an
interview, cautioning that any IPO wouldn't occur before 2018. Even
then, he added, a public offering is only one of several financing
options the company is considering. Other possibilities include
deals with private-equity firms to invest in Suntory business
units, or sales of noncore assets, he said.
"I do not stress the possibility of an IPO," he said. "We have
to study carefully, in detail, every option."
Suntory has already divested itself of some holdings since the
Beam deal, including French cognac brand Louis Royer. Over the
weekend it agreed to sell its stake in a joint venture with
Tsingtao Brewery Co. of China.
The Beam deal weighed down Suntory with a heavy debt burden,
putting pressure on the company to increase sales of bourbon and
other drinks. Suntory has a BBB long-term credit rating from
Standard & Poor's Ratings Services. Mr. Niinami said he wanted
to lift that to A-minus by 2018.
Suntory—which also makes Japanese whisky, nonalcoholic drinks
and other packaged goods—will keep its U.S. focus on distilled
spirits, Mr. Niinami said.
Mr. Niinami said Suntory was considering introducing its beer,
currently sold only in Japan and a handful of other markets, in the
U.S. Anheuser-Busch's planned takeover of SABMiller will provide
economies of scale for mass-market brewers, while generating new
demand for craft beers, imports and other high-end alternatives to
the likes of Budweiser and Miller Lite, he said.
Mr. Niinami said Suntory would consider a "strategic
partnership" to sell beer in the U.S. For now, the company's
brewing operation concentrates on Japan, where it is the No. 3
player behind Asahi Breweries Ltd. and Kirin Holdings Co., with a
strong position at the high end of the market.
"We will be able to shake hands with premium players," he said.
"The huge market share of one player will create
opportunities."
Mr. Niinami said the company wouldn't bid for any beer brands
that the combined Anheuser-Busch and SABMiller might have to sell
to satisfy antitrust authorities.
While analysts say some of Japan's big-four brewers, which also
include Sapporo Breweries Ltd., might need to join forces to
survive in a shrinking, aging market, Mr. Niinami said Suntory
wouldn't take part in any such combinations.
"We are not interested in consolidation of the beer market in
this country," he said.
Write to Eric Pfanner at eric.pfanner@wsj.com
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(END) Dow Jones Newswires
October 22, 2015 07:35 ET (11:35 GMT)
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