TOKYO-The food and drink unit of the Japanese brewing company Suntory Holdings set a modest share price for its much-anticipated initial public offering, reflecting weaker demand from investors amid volatile markets in Tokyo.
Still, the deal ranks as Japan’s, and Asia’s, biggest I.P.O. this year.
Suntory Beverage & Food is set to raise as much as 388 billion yen, or $3.96 billion, from the sale of as many as 125 million shares, according to a filing made Monday with the Tokyo Stock Exchange. The drink maker priced its shares at 3,100 yen each, near the bottom of the range of 3,000 yen to 3,800 yen it had announced June 17.
Suntory Beverage & Food, which sells a range of soft drinks in Japan including Pepsi, Orangina and the Boss canned coffee line, has been expanding overseas to make up for a saturated market back home. Kirin and Asahi, Suntory’s rivals in Japan, are also looking to expand overseas through acquisitions.
In 2009, Suntory bought the European beverage maker Orangina Schweppes for 2.6 billion euros, or $3.4 billion at current exchange rates, and followed up with the acquisition of Funcor Group, one of New Zealand’s largest beverage makers. Its initial public offering will raise funds to fuel further overseas purchases.
When it was announced late last month, Suntory appeared to have planned the offering at an opportune time, as shares in Tokyo had been soaring on strong expectations for the new economic policies of Prime Minister Shinzo Abe. But after peaking in mid- May, Japan’s benchmark Nikkei index has slumped 16 percent amid skepticism among investors over some aspects of Mr. Abe’s growth plans, as well as concerns over economic growth overseas.
Still, Suntory’s share sale is Asia’s biggest since Japan Airlines, the country’s flagship carrier, pulled off a 663 billion-yen offering in September.
The deal calls for the beverage unit to issue 93 million new shares, while the parent company, Suntory Holdings, will sell 26 million existing shares plus an overallotment of 6.2 million shares, according to the filing.
The offering is set to be split almost evenly between domestic and foreign investors. The lead global underwriters on the deal are JPMorgan Chase, Morgan Stanley and Nomura Holdings. The lead banks on the domestic portion of the offering are Nomura and Mitsubishi UFJ Morgan Stanley Securities.
After the listing, scheduled for July 3, Suntory Holdings will own 61.5 percent of the beverage unit.
Suntory is a century-old brewer based in Osaka and known for producing Japan’s first whiskey. One of Japan’s largest privately held companies, its sprawling operations span brewing, soft drink manufacturing and the growing and selling of flowers.
Suntory Time, a fictitious Suntory whiskey pitched by the actor Bill Murray in the ! Hollywood film ‘‘Lost in Translation,’’ catapulted Suntory to global fame. In real life, Japan’s top- selling whiskey is Suntory’s Kakubin, known for its square-cut, tortoise-shell- like bottle.
