TOKYO -- Suntory Holdings is in talks to invest in major Indian liquor producer Radico Khaitan group, the latest in a series of moves by the Japanese firm to expand overseas.
Suntory is expected to spend around 10 billion yen ($97 million) to buy an interest of more than 20% in a liquor unit to be established by Radico.
Radico is the third-largest liquor maker in India, mainly producing such spirits as whiskey and gin. It generated sales of 24.4 billion rupees ($446 million at the time) in fiscal 2012.
Suntory has been selling its Hibiki and Yamazaki premium whiskeys to the affluent in India through a sales partnership it formed with Radico in 2011. The Japanese firm apparently decided that Radico's whiskey-centric business model is a good match for its own global strategy.
According to industry estimates, roughly 300 million cases of spirits were consumed in India in 2012, more than double the tally in Japan. Through the latest deal, Radico is expected to employ Suntory's marketing expertise in the Indian market. The aim is to boost sales of locally popular 8 PM whiskeys and other Radico-brand products to India's middle class, which is projected to grow.
At the same time, Suntory hopes to increase sales of its own products in India by making use of Radico's sales channels.
With the Japanese liquor market languishing as the population declines, Suntory has been ramping up sales of liquor and food in Asia. The company acquired a Chinese wine importer in 2009 and formed a joint venture with Indonesian food giant GarudaFood Group in 2011. In January, it reached an agreement to acquire U.S. distiller Beam, the maker of Jim Beam bourbon, for $16 billion.