Shares in Suntory’s food-and-beverage unit rose modestly on their market debut, gaining more than two percent after the biggest initial public offering in Japan this year.
Suntory Beverage & Food stocks started up 0.65 percent at 3,120 yen against their initial public offering (IPO) price of 3,100 yen.
They extended the gain to 2.58 percent after the first 30 minutes of trading in a broader market moving downwards. The benchmark Nikkei 225 index was off 0.12 percent.
The Japanese drinks maker said last month it had raised 387.5 billion yen ($3.9 billion) in its share sale after a string of overseas acquisitions aimed at offsetting a shrinking domestic market.
About 125 million shares were sold at 3,100 yen apiece in the privately held company’s Suntory Beverage & Food unit. The pricing was at the low end of a range announced in May.
At the time, Suntory said the listing could fetch as much as 475.76 billion yen, or 3,800 yen per share.
The company cited market turbulence for the lower price, but added that demand outstripped the number of shares on offer.
Tokyo’s stock market, one of the world’s best performers this year, has seen wild volatility since the Nikkei 225 index hit a five-year high in late May.
It has recently bounced off lows that shaved as much as 20 percent from its peak price as stronger Japanese economic data have helped buoy investor spirits.
The Suntory unit, which produces non-alcoholic beverages including soft drinks and bottled tea, last year reported sales of 992.1 billion yen, or more than half of the Suntory group’s 1.85 trillion yen in revenue.
Some of the IPO proceeds would be used to pay off short-term bank loans while the rest would be earmarked for “strategic domestic and international investments aimed at growing the company”, the unit has said.
Suntory’s founding family, which established the firm in 1899, retains a stake of nearly 90 percent in the Osaka-based company, one of Japan’s biggest brewers and non-alcoholic drinks makers.
Suntory is well known in Japan for print advertisements and television commercials including those starring American actors such as Tommy Lee Jones.
Three years ago, the company scrapped plans to merge with Japanese beverage giant Kirin to create one of the world’s largest beer and soft-drink companies.
The proposed merger fell apart in 2010 with Kirin, Japan’s top brewer, saying the two firms disagreed over whether the merged company would be publicly listed, while Suntory cited discord over how control would be split between the long-time rivals.
Major Japanese beverage makers have aggressively sought to expand abroad in recent years to offset their shrinking domestic market, while a strong yen made the foreign shopping spree relatively cheaper.
Suntory said last year it would form a joint venture with Chinese brewer Tsingtao to expand its reach in the world’s biggest beer market.
It has also said it would acquire a 51-percent stake in Indian food and drink maker Narang Group and set up a joint venture.
In 2009 it bought Europe’s Orangina Schweppes Group for about $3.3 billion.
Suntory shares make modest rise on debut
