Suntory Holdings is to acquire Beam Inc. for US16 billion, bringing together two spirits producers with significant travel retail businesses.
The deal will see Suntory acquire all outstanding shares of Beam for US$83.50 per share and has been unanimously approved by each company’s board of directors. It is expected to close in the second quarter of 2014, subject to Beam stockholders’ approval, regulatory approvals and other customary closing conditions.
According to today’s announcement, the combined companies’ annual net sales of spirits products exceed US$4.3 billion. Beam President and CEO Matt Shattock and the current management team will continue to lead the business, from Beam’s headquarters near Chicago.
In travel retail, Beam currently has a several arrangements for marketing and distribution in different regions. In some markets it manages the business itself or through joint ventures, while in the key European travel retail market its portfolio is distributed by Maxxium Travel Retail.
Brands within Beam’s portfolio include 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. Meanwhile, Suntory’s portfolio includes Japanese whiskies Yamazaki, Hakushu, Hibiki and Kakubin, Bowmore Scotch whisky and Midori liqueur.
Suntory President and Chairman of the Board Nobutada Saji said: “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. We are particularly excited about the prospect of working more closely with Beam’s excellent management and employees who will play an integral part in the growth of the business.”
The companies said that, once the deal is completed, they would aim to achieve growth in markets worldwide, including the USA, by leveraging a combined portfolio of strong brands, an expanded distribution network and fully sharing production and quality control experise.
The companies already have an existing relationship; Suntory distributes Beam products in Japan while Beam distributes Suntory’s products in Singapore and other Asian markets.
“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,” said Beam President and CEO Matt Shattock.
“Together we will be a global leader in distilled spirits with the number three position in premium spirits and a dynamic portfolio across key categories. With particular strength in bourbon, Scotch, Canadian, Irish and Japanese whisky, the combined company will have unparalleled expertise and portfolio breadth in premium whisky, which is driving the fastest growth in Western spirits.
“Our combined global routes to market will expand our joint distribution footprint, and the powerful innovation capabilities both companies have developed will be a significant advantage. Backed by the expertise and the financial resources of Suntory, the people of Beam look forward to working with the Suntory team to continue outperforming our global market and to building on the proud traditions and deep heritage of our brands across all the major spirits categories.”
