Analysis - Africa a target for Suntory IPO cash
Suntory's food and beverage unit started trading in Tokyo last week
Suntory may use its IPO funds for acquisitions in Africa, with South Africa'a Pioneer Foods Ceres fruit juice a potential target, an analyst has told just-drinks.
The Japanese firm has a “full warchest” after last week's US$3.9bn share shale and will likely use it to purchase “well-established local or regional brands” similar to previous acquisitions Frucor and Orangina-Schweppes, Torsten Stocker, an Asia-based consumer goods analyst, said today (11 July).
He added: “I would expect emerging markets to be particularly interesting to Suntory, in particular Latin America, South-East Asia and even Africa,” Stocker said.
“(South Africa's) Pioneer Food's Ceres fruit juice could be interesting, with a good domestic position as well as a nicely growing export business,” he added.
Stocker also said Suntory is unlikely to look closely at China, though European brands could feature, “perhaps as a bolt-on to Orangina-Schweppes”.
Suntory has been linked with GlaxoSmithKline brands Lucozade and Ribena, which were put up for sale in April, and Stocker said they “fit the bill in terms of scale, brand strength and reach, including in parts of Asia and Africa”.
In May, Suntory won approval to list its soft drinks and food unit on the Tokyo Stock Exchange and said it planned to use the money to make strategic investments at home and abroad.
Pioneer Food Group is based in Paarl, South Africa, and owns the The Ceres Beverage Company, which makes fruit juices, fruit concentrate mixtures, mineral water, ice tea and carbonated soft drinks.
Its fruit juice portfolio, which includes Ceres fruit juice, has captured nearly 50% market share of the long-life fruit juice category in South Africa, according to the company's website.
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