Japanese drinks - splashing the cash Mix many drinks brands, a soft market for them, and a strong currency, and there is a recipe for foreign dealmaking. Suntory, the privately owned Japanese drinks group, is seeking funds to head where its rivals have already spent billions: anywhere but Japan. It plans to list its food and soft drinks unit to raise the cash in order to follow a very similar path. Asahi, Sapporo and Kirin have spent more than Y1tn ($12bn) since 2006 on foreign adventures, or more than half their combined operating cash flow over that period. Suntory, too, has substantial form: it paid $3.8bn for Orangina Schweppes in 2009 and $1.3bn for New Zealand's Frucor (V energy drink) in 2008. The biggest reason for looking abroad is simple: Japan is a mature market. Sales of beer and similar drinks will contract by about 1 per cent this year, according to Nomura. This is better than its recent rate of decline of up to 3 per cent a year, but that is small comfort to investors. Yet overseas purchases are no easy fix. Sure, Kirin - by far the boldest of the four in cash-splashing terms - generated a tenth of its operating profits from its overseas drinks businesses last year, rising to almost a fifth in the first nine months of this year, at Y17bn. Impressively, it expanded its margin by a fifth in the process. But the success comes only after Y39bn in goodwill write-offs. Thoughts of a cash-rich, deal-hungry buyer will have dealmakers drooling. Suntory has given few details of its float plans yet. Still, its food and drinks unit made Y971bn in sales last year, just over half of its business. It forecasts those sales to hit Y2tn by 2020 - a hefty 8 per cent in compound growth a year. The company says it is setting up a team within the business in January to explore potential deals. Judging by the slow early years of its peers" acquisitions, it will have to move fast if it wants to stay on target.