TOKYO -- Suntory Holdings, one of the nation's biggest privately held companies, will consider going public as early as 2018 to pay down its bulging debt and raise growth capital, The Nikkei has learned.
The company will decide as early as this year whether to launch an initial public offering, which will likely value it at some 3 trillion yen ($24.3 billion). It has opened itself up to IPO proposals from financial institutions. Its brands include Yamazaki whiskey and Jim Beam bourbon.
Suntory will consider listing on the New York or Tokyo stock exchanges. Relisting U.S. distiller Beam, bought last year for 1.65 trillion yen, is one option. But Suntory's IPO debate is expected to focus on taking the Osaka-based holding company public.
Founded in 1899, Suntory has remained in private hands for more than a century. Kotobuki Realty, which serves as an asset management company for the founding Torii and Saji clans, owns about 90% of the holding company's stock and will likely retain a majority stake even after an IPO. Suntory Beverage & Food, the group's soft-drink arm, listed on the Tokyo Stock Exchange in 2013.
Suntory rang up sales of 2.45 trillion yen last year, surpassing Kirin Holdings to become the biggest player in Japan's food industry.
But with 1.8 trillion yen in interest-bearing liabilities as of March 31, it will look to the stock market to raise funds for new bids for growth. Gazing beyond the domestic market, the company will chart the path to becoming "a true global company," as declared by Chairman Nobutada Saji.
Suntory's equity ratio has sagged below 20% under the weight of its debt. Its financial health has become a source of anxiety at the company. When listed unit Suntory Beverage bought Japan Tobacco's vending machine operations for some 150 billion yen last year, executives at Suntory Holdings voiced concern about the need to maintain its credit rating.
The group is trying to consolidate operations, an effort that will see it divest French cognac maker Louis Royer next month.
At an estimated 3 trillion yen, Suntory Holdings' initial market capitalization would be expected to surpass the market values of domestic rivals Asahi Group Holdings and Kirin.
Mergers and acquisitions remain essential for Suntory if it hopes to compete with global food and beverage groups generating three or four times its sales. But such deals could put more strain on its balance sheet. The leeway an IPO would provide would broaden Suntory's M&A options.