Suntory Beverage & Food Ltd. will buy Japan Tobacco Inc.’s vending machines for about ¥150 billion to add to its own, closing a distribution gap with Coca-Cola Co.
JT will sell its vending machine units and transfer two of its beverage brands to Suntory Beverage, the cigarette-maker said in a statement Monday. Suntory Beverage, which sells Pepsi products alongside bottled green tea and other beverages, will acquire about 260,000 machines through the deal, Executive Vice President Saburo Kogo said in a briefing in Tokyo.
Coca-Cola, the world’s largest beverage company, has the most beverage vending machines in Japan, with 980,000 of the devices installed throughout the country. Adding JT’s machines to Suntory Beverage’s 490,000 will allow the latter to better compete, according to Kazuhiro Miyashita, a board member at researcher Inryosoken.
“I see Suntory is serious about overtaking Coca-Cola,” Miyashita said Monday. “Vending machines are the best sales channel for soft drinks and this would be the way that allows Suntory to win the competition.”
Japan has a total of about 2.5 million vending machines that peddle more soft drinks than all the convenience stores nationwide, according to data from the Japan Vending Machine Manufacturers Association.
Japan Tobacco had approached potential buyers about a deal, including Asahi Group Holdings Ltd. and several private-equity firms, sources familiar with the matter said last month.
Takeshi Niinami, president of parent Suntory Holdings Ltd., had said in February that Suntory Beverage was looking into the acquisition. Japan Tobacco was exploring the sale after saying in February it would exit its drinks business for the Roots and Momono Tennensui brands.
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