Tokyo, Aug 12 - Japanese brewer Sapporo Holdings Ltd plans to buy into unlisted beverage maker Pokka, a source said, as depressed beer sales force it to seek growth in a soft-drinks market dominated by Coca-Cola.
Japanese beverage makers are banding together, seeking not only to expand their beer operations overseas but also build scale in the soft-drinks market.
Brewers Kirin Holdings and Suntory Holdings have started merger talks, and their combined domestic market share in soft drinks would rival Coca-Cola's 30 percent.
Sapporo, whose biggest shareholder is the U.S. activist fund Steel Partners, will buy 20 percent of Pokka from investment fund Advantage for around $100 million, said the source. Advantage Partners owns 60 percent of Pokka, which is known for its canned coffee.
But some analysts said the alliance with Pokka is unlikely to lift Sapporo's beverage business significantly, given their small presence.
"Sapporo and Pokka's market shares are both small, less than 2 percent each," Credit Suisse analyst Yoshiyasu Okihira wrote in a note to clients.
"The impact on Sapporo's earnings would be very limited," he said.
In Japan's packaged soft-drinks market, Coca-Cola has a 29.4 percent share, followed by Suntory with 18.3 percent and Kirin's 11.1 percent, according to data from industry magazine publisher Inryo Soken. Sapporo has 1.4 percent and Pokka 1.8 percent.
The Nikkei business daily said Sapporo and Pokka would cooperate with Meiji Holdings, a confectionary and dairy food maker, which owns about 20 percent of Pokka.
The Nikkei said Sapporo might also forge capital ties with Meiji, but the source said such move is not yet being considered. The source declined to be identified because the talks have not been made public. ($1=95.98 Yen)