Suntory hires UBS to sell local food, instant coffee unit

Sarah Thompson, Anthony Macdonald, Joyce Moullakis
April 19, 2017
AFR 

Japanese drinks giant Suntory Beverage & Food has decided it too prefers a cup of fresh coffee to the instant stuff, kicking off a sale process for the food and instant coffee business of subsidiary Cerebos.

As first reported by Street Talk on Wednesday, investment bank UBS has been appointed to sell Suntory’s food and instant coffee business in Australia and New Zealand, and its Asian Homer Gourmet unit in Singapore.

Suntory will retain its fresh coffee business, which is expected to be beefed up to capture a bigger share of the market.

Up for grabs is the food and instant coffee business that is home to well known Australian brands including Saxa salt, Gravox, Fountain sauces and Foster Clark’s, among others.

The sale is expected to take six to nine months and UBS will be asked to canvas interest among potential buyers in Australia and offshore.

“While we have made great progress in recent years, including significant improvements to the efficiency of our manufacturing operations, food and instant coffee are not a core category focus for Suntory Beverage & Food and growth opportunities can potentially be maximised under different ownership,” Terry Svenson, chief executive of Cerebos Australia and New Zealand, said.

It’s not the first time Cerebos has considered selling the unit.

As Street Talk revealed last year, banks were invited to pitch potential sale structures and valuations as it weighed auctioning the assets.

Cerebos Australia and New Zealand is understood to record sales worth about $300 million a year and earnings of about $20 million.

Suntory Beverage & Food is a global soft drink company with consolidated net sales of approximately 1.4 trillion yen in 2016. It is headquartered in Japan and listed on the Tokyo Stock Exchange.