Japan Suntory Unit Listing to Be Approved for $5 Billion IPO: Source

Suntory Beverage & Food Ltd.'s Kuro Oolong tea
Kiyoshi Ota | Bloomberg | Getty Images
Suntory Beverage & Food Ltd.'s Kuro Oolong tea

Suntory Holdings is set to receive Tokyo Stock Exchange approval as soon as Wednesday to list its food and non-alcoholic beverage unit, a source with direct knowledge of the process told Reuters.

The clearance would set the stage for an initial public offering that a separate source with knowledge of the situation has said could raise as much as 500 billion yen ($5 billion), in what is expected to be Japan's largest IPO of the year.

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The Osaka-based drinks maker wants to raise funds for acquisitions and growth in overseas markets.

Japanese beverage companies such as Suntory, Kirin Holdings and Asahi Group are aggressively pursuing overseas expansion to lessen their reliance on a shrinking home market.

Suntory, which makes C.C. Lemon brand soft drinks and Yamazaki single malt whisky, has set a goal of more than doubling sales at its food and beverage unit to 2 trillion yen by 2020.

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Suntory has acquired soft drinks maker Orangina Schweppes and New Zealand's No. 2 beverage firm Funcor Group. In 2011, it entered into a joint venture with Indonesian food and beverage group GarudaFood.