Asahi Group Holdings Ltd. is considering acquiring U.S. sparkling-water maker Talking Rain Beverage Co. for about ¥50 billion ($415 million) in a bid to tap into a larger market overseas, sources close to the matter said Tuesday.
Talking Rain, founded in Seattle in 1987, is known for its “Sparkling Ice” line of carbonated beverages.
The maker of Super Dry beer and Wilkinson ginger ale in Japan has sought overseas expansion in recent years to make up for a lack of growth in the Japanese market, buying beverage firms in Malaysia and Indonesia between 2011 and 2013.
But with overseas sales accounting for less than 20 percent of its total sales, it is lagging behind its Japanese rivals with a higher share of overseas sales in their overall sales, such as Kirin Holdings Co. and Suntory Holdings Ltd.
Asahi said Tuesday that it is exploring various possibilities regarding new capital alliances, including the acquisition of Talking Rain shares, but added that “no decision has been made at this point.”
At the price, the deal would be Asahi’s largest overseas since the $1.3 billion acquisition of New Zealand-based Flavoured Beverages Group Holdings in 2011. Talking Rain sells fruit-flavored sparkling water, tea and lemonade in the U.S., where health-conscious consumers are shifting away from sodas. Asahi has spent about $4.3 billion buying overseas beverage makers since 2004, including Schweppes Australia Pty. in 2008 and an increased stake in China’s Tsingtao Brewery Co. in 2009.
The Japanese brewer may look for expansion in the U.S. as it expects beer demand in Japan to slump about 1 percent a year with an aging and shrinking population. Revenue from outside Japan accounted for about 13 percent in 2014, up from zero in 2011.
Sales this year will probably rise about 4 percent to ¥1.86 trillion, according to the average of 12 analyst estimates. That would be the slowest growth since 2011, when an earthquake, tsunami and nuclear disaster in Japan hurt consumption.
Talking Rain is privately owned and operated, according to its website.
Real estate investors and builders Donald Kline and Donald Jasper bought the company along with Lawrence Hebner, a former stockbroker, in 1987, Forbes reported in 2013.
Asahi was little changed at ¥3,763 as of 12:50 p.m. in Tokyo trading Tuesday. The shares have gained 0.4 percent this year, compared with the 9.2 percent advance for the benchmark Topix index.
The company is also among the brewers and buyout firms such as KKR & Co. that are considering bids for SABMiller PLC’s European beer brands, people familiar with the matter said earlier this month. Bids are due in January, and deliberations are at an early stage, the sources said.
Asahi’s cash and near cash stood at ¥58.3 billion as of Sept. 30, compared with ¥45 billion a year earlier, according to data compiled by Bloomberg.
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