Suntory Beverage & Food (SBF) has signed a basic agreement to buy beverage business of Japan Tobacco (JT) for $1.2bn.
According to SBF, the deal also includes acquisition of canned coffee brand Roots and peach-flavored drink brand Momono Tennen-sui.
Under the agreement, JT will transfer all shares it currently holds in subsidiaries conducting vending machine operation business, Japan Beverage Holdings Inc. (JB) and JT A-Star Co., Ltd. (JTA).
The two JT units operate 260,000 drinks machines. With the acquisition, SBF will now operate about 750,000 vending machines.
The development follows after the company revealed its plans in February this year to withdraw from beverage business.
Having entered the beverage business in 1988, JT rose to become Japan's 10th-biggest soft-drinks maker. It currently controlled only 1.6% of the market share in the country. SBF is the second-biggest soft drinks maker behind Coca-Cola in the country.
Suntory Beverage president Nobuhiro Torii was quoted by Reuters as saying: "We want to be the No.1 beverage maker in 2020 and we know it won't be easy.
"We have got a strong partner to achieve this goal."
The transaction will be funded in cash and loans and is expected to be completed by July, subject to regulatory approval.
