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Japan's Suntory To Buy Jim Beam Maker In $16 Bln Deal


Japan's Suntory Holdings Ltd. agreed Monday to acquire the maker of two iconic American whisky brands for about $16 billion, including assumption of debt.

Suntory will pay $83.50 per share in cash for distilled spirits maker Beam, Inc. (BEAM), which makes the popular Jim Beam and Maker's Mark whiskies.

The deal will see the creation of the world's third largest premium spirits player with annual net sales of spirits products exceeding $4.3 billion.

"I am delighted that we can announce this agreement with Beam, a company with a portfolio of leading global brands, including Jim Beam and Maker's Mark, and a strong global distribution network. I believe this combination will create a spirits business with a product portfolio unmatched throughout the world and allow us to achieve further global growth," Suntory President and Chairman Nobutada Saji said in a statement.

The deal, unanimously approved by both the companies board of directors, is expected to close in the second quarter of 2014.

The offer price represents a 25 percent premium over Beam's closing price of $66.97 on Friday, and a 24 percent premium over the volume-weighted average share price over the last three months. The Beam shares have hit a 52-week high and are now up 26 percent in pre-market dealings.

Suntory said it intends to fund the deal through a combination of cash at hand and fully committed financing provided by the Bank of Tokyo-Mitsubishi UFJ.

The closure of the deal is subject to approval be Beam stockholders, regulatory approvals and other customary closing conditions. Beam noted that it will have achieved a total shareholder return of 106 percent since it became a standalone spirits company in October of 2011. Beam was formed from the break up of Fortune Brands, Inc., which was originally founded in 1904.

Following closure, the Beam business will continue to be led by its President and CEO Matt Shattock and the current Beam management team as well as continue to be headquartered in Deerfield, Illinois.

"This is a very exciting development that delivers substantial value for our stockholders and creates an even stronger global company with an excellent platform for future growth. Together we will be a global leader in distilled spirits with the #3 position in premium spirits and a dynamic portfolio across key categories," Shattock stated.

Suntory already distributes Beam products in Japan and Beam distributes Suntory's products in Singapore and other Asian markets under an ongoing successful business relationship.

The combined company will carry a portfolio of leading brands such as Beam's Jim Beam, Maker's Mark and Knob Creek bourbons, Teacher's and Laphroaig Scotch whiskies, Canadian Club whisky, Courvoisier cognac, Sauza tequila, and Pinnacle vodka, as well as Suntory's leading Japanese whiskies Yamazaki, Hakushu, Hibiki, and Kakubin, Bowmore Scotch whisky and Midori liqueur.

BEAM closed Friday's regular trading session at $66.97, up $0.49 on a volume of 0.39 million shares. In the past 52-week period, the stock has been trading in a range of $59.66 to $70.63.

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