Suntory to buy drinks vending business from Japan Tobacco for $1.2bn

According to media reports, Suntory Beverage & Food is to buy cigarette maker Japan Tobacco’s drinks vending business for ¥150bn ($1.2bn).

Reports state that, according to Suntory executive vice president Saburo Kogo, Suntory Beverage will acquire an estimated 260,000 machines. The acquisition is also said to include two beverage brands: Roots canned coffee and Momono Tennensui peach-flavoured water.

According to industry publication Inryosouken, Japan Tobacco held only 1.6% of the market in 2014, whereas Suntory and Coca-Cola each controlled more than 20% of the market share.

Coca-Cola currently has the largest number of drinks vending machines in the country, with 980,000 devices installed in Japan. This deal has been described as a move to close the gap between Suntory and Coca-Cola, as Suntory Beverage will now operate an estimated 750,000 machines and aims to become the top beverage company in Japan by 2020.

Japan Tobacco’s exit from the highly competitive beverage industry will allow it to focus on tobacco, food and drug operations. The deal is expected to be completed by July 2015.