Sunday, April 20th7.1°C
21427
20944

Suntory Holdings buying spirits maker Beam for about $13.62 billion

NEW YORK, N.Y. - The maker of classic American whiskeys Jim Beam and Maker's Mark has agreed to be acquired by a Japanese company in a $13.62 billion deal that would create the third largest global premium spirits business.

Shares of Beam Inc. rose 24 per cent on Monday after it said that it agreed to be purchased by Suntory Holdings Ltd., a Japanese beverage company. The combined company would have annual sales of more than $4.3 billion.

The deal follows other recent acquisitions in the alcohol industry, including Anheuser-Busch InBev's $20.1 billion deal last year to buy the other half of Mexican brewer Grupo Modelo that it didn't already own.

It also comes at a time when the taste for bourbon — a type of American whisky that is made primarily of corn and typically distilled in Kentucky — continues to grow domestically and abroad.

In the U.S., sales volume for bourbon and Tennessee whiskeys such as Jack Daniels has grown 26 per cent over the past decade, according to the Distilled Spirits Council, and industry group. Exports of U.S. whiskeys has grown to roughly $1 billion last year, more than double what it was a decade ago.

Demand is so robust that Beam last year even considered reducing the alcohol content for Maker's Mark because of a supply shortage. The company scrapped the idea after a backlash by fans of the higher-end bourbon.

"We're basically in the middle of a global whiskey renaissance," said Frank Coleman, a spokesman for the Distilled Spirits Council.

Suntory and Beam already had a relationship. Suntory distributes Beam products in Japan and has a portfolio of spirits with whiskies, including Yamazaki and Hakushu as well as Midori liqueur and other beverages. And Beam, which is based in Deerfield, Ill., distributes Suntory's products in Singapore and other Asian markets.

Suntory President and Chairman Nobutada Saji said in a statement that the acquisition will help Suntory further its global growth. In recent years, Suntory has also purchased French beverage maker Orangina Schweppes Group and GlaxoSmith Kline's Lucozade and Ribena drinks.

Beam spokesman Clarkson Hine said for now, the deal will result in few changes for fans of Beam's bourbons. He also said that Beam, which was spun off as a stand-alone liquor company in 2011 from conglomerate Fortune Brands Inc., will continue with its current management.

"It's business as usual," Hine said, noting that Suntory has indicated it wants the company to "keep doing what we're doing."

Allen Adamson, managing director of Landor Associates, a New York-based branding firm, said Beam can gain a competitive advantage from being part of bigger company with deeper pockets. He said that ownership by a foreign company shouldn't hurt the All-American images of Beam's brands.

"The trick is to maintain its authenticity, and not muck with the core elements," he said.

Suntory will pay $83.50 per share, a 25 per cent premium to Beam's Friday closing price of $66.97. The companies put the deal's value at about $16 billion, including debt.

Suntory plans to fund the deal with available cash and fully committed financing from The Bank of Tokyo-Mitsubishi UFJ. Both companies' boards unanimously approved the transaction, which is targeted to close in the second quarter.

The deal needs approval from Beam Inc. stockholders.

Shares of Beam rose $16.14 to $83.11.

The Canadian Press


Read more Business News

20828


Recent Trending




Today's Market
S&P TSX14500.39+53.87
S&P CDNX998.770.80
DJIA16408.54-16.31
Nasdaq4095.516+9.291
S&P 5001864.85+2.54
CDN Dollar0.90720.00
Gold1293.80-9.2999
Oil104.59+0.83
Lumber326.10-2.70
Natural Gas4.735+0.205

 
Okanagan Companies
Pacific Safety0.115+0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.29+0.07
Cantex0.055+0.01
Anavex Life Sciences0.3750.00
Metalex Ventures0.08+0.005
Russel Metals30.66+0.11
Copper Mountain Mining2.35-0.07
Colorado Resources0.255-0.01
ReliaBrand Inc0.12-0.01
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.25+0.02

 



20172

FEATURED Property
1758470#52 5484 25 Avenue
2 bedrooms 2 baths
$137,500
more details
image2image2image2
Click here to feature your property
Please wait... loading


Learning to flirt with the edge

With all of the adventure activities I have done and still do, I wonder sometimes if the edge still exists. The systematic approach to learning a new adventure or extreme activity combined with the r...


Time spent prospecting

How much time should you put into prospecting? The question is a bit of a puzzle. Ideally, there would be a reference book that lists, by industry, how much time you should invest in prospecting acti...


Valuation fears grip markets

The Big Picture Valuation fears grip markets Growing concerns about the level of stock market valuations sparked a risk-off trade in global markets this week. Investors are worried that many companies...

_



21368

21368


Member of BC Press Council


21202