July 15/Tokyo/Dow Jones -- Suntory Holdings Ltd. has reached an accord to form a soft drink joint venture in Indonesia with packaged beverage and food company Garudafood Group, in an effort to tap into growing demand in Southeast Asia.

Suntory Beverage & Food Ltd., a unit of privately held Suntory Holdings, will buy a 51% stake in the joint venture it will launch with Garudafood. At the same time, Garudafood will transfer its soft drink business to the joint venture.

The Japanese company will also buy a 34% stake in PT Sinar Niaga Sejahtera, the exclusive sales and distribution arm of Garuda food's beverage and food products.

The combined amount in these deals is estimated at around 10 billon yen, according to a person familiar with the matter.

The move is the latest attempt by Suntory to gain further presence outside Japan to drive its growth. Such a move is necessary as Japan's food and beverage sector has been dealing with a sluggish domestic market burdened by a shrinking population and a weak economy.

Suntory Beverage & Food President Nobuhiro Torii told reporters earlier this year that the company is eyeing M&A activities in Southeast Asia, which the company sees as "key" due to its growing populations and economies.

From the July 18, 2011,Prepared Foods' Daily News.