JAPAN/INDIA: Suntory Holdings silent on Radico Khaitan stake reports

By | 3 September 2013

Suntorys soft-drinks unit held an IPO this year

Suntory's soft-drinks unit held an IPO this year

Suntory Holdings has declined to comment on a report it is in talks to buy a 26% stake in India's second-largest spirits producer, Radico Khaitan.

India's Economic Times, citing investment bankers close to the transaction, reported this morning that Suntory is expected to pay INR8.7bn (US$130.9m) for the part-share. The deal is likely to include a provision to buy a further 23% stake at a later date, the report suggested.

The Khaitan family could retain a stake in the distillery business and provide outsourcing support to Suntory, it was reported.

A spokesperson for the Japanese group told just-drinks today (3 September) it does not comment on media speculation. 

Nobody from Radico Khaitan was available for comment. 

In 2009, Radico reportedly wanted to sell a 26% stake in the company, with Suntory mentioned as a possible suitor. In 2011, the two companies signed a distribution and marketing deal to launch Suntory's Yamazaki 12 Year Old and Hibiki 17 Year Old whiskies in India.

Suntory last month boosted its acquisition funds after its food & soft-drinks unit was listed on the Tokyo Stock Exchange. The IPO raised US$3.9bn, and company executives have said the money will be used for strategic investments at home and abroad. Suntory's alcohol unit was not included in the stock market floatation.

Expert analysis

Suntory Holdings Ltd in Soft Drinks (World)

The changed organisational structure within Suntory and the highlight of Latin America, Middle East and Africa reflect Suntory’s globalisation ambition. The company is encouraged to expand into major RTD tea and RTD coffee markets such as the US and Southeast Asia by leveraging its category competencies. Its weak spot in the Americas and Middle East and Africa should be addressed more immediately.

Sectors: Mergers & acquisitions, Spirits

Companies: Suntory, Radico Khaitan

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JAPAN/INDIA: Suntory Holdings silent on Radico Khaitan stake reports

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