Suntory puts acquisitions on hold after US$16b spree
Japan's beverage firm targets leadership position after acquisitions
After a US$16 billion whisky binge, Suntory Holdings is keeping its wallet in its pocket.
Suntory, Asia's biggest-spending beverage acquirer over the past five years, planned to hold off on buying overseas companies for three years, president Takeshi Niinami said.
The company hired Niinami from convenience store operator Lawson in October last year as Japan's shrinking and ageing population compels it to look abroad for growth.
Suntory's US$16 billion purchase of US spirits maker Beam last year has helped raise the portion of revenue from overseas, while boosting debt and causing its credit rating to drop.
"It's too early," Niinami said when asked about further cross-border acquisitions. "We can't be a global player unless the Beam deal turns out successful."
Niinami said he wanted to be more than just a player: he aims to become the world No1 in hard liquor and soft drinks, meaning he will have to overtake Diageo in spirits and companies like PepsiCo, Coca-Cola and Nestle in non- alcoholic drinks.
Adding Beam, the maker of Jim Beam bourbon, Canadian Club and Maker's Mark whisky, makes Suntory the world's sixth-largest spirits maker by 2013 volumes, overtaking Bacardi, according to research firm Euromonitor International.
Niinami said he was working on integrating Beam, whose US distribution network gives Suntory wider access to the growing market for whisky. At home, the company's soft drinks unit was looking into whether to buy Japan Tobacco's vending machine business, he said.
Suntory has made four purchases over the past five years totalling US$15.7 billion, based on transaction value, the most among beverage companies in Asia.
Net debt reached 1.83 trillion yen (HK$119.1 billion) in September, swinging from a cash surplus a year earlier.
In May, Moody's Investors Service cut Suntory's credit rating to Baa2 from A3, citing the company's high leverage after acquiring Beam.
