Suntory Holdings Limited announced that it is to buy all outstanding shares in Beam Inc. for $83.50 per share in cash, i.e. it is to acquire the US drinks company for $16 billion, including an undertaking to assume the company’s outstanding net debt.
According to Suntory, “The transaction consideration represents a 25% premium to Beam’s closing price of $66.97 on January 10, 2014; a 24% premium to the volume-weighted average share price over the last three months; and a multiple of more than 20 times Beam’s EBITDA for the 12-month period ended September 30, 2013.”
Members of the boards of directors of both companies voted unanimously to approve the transaction, which is expected to be finalized during the second quarter of this year, assuming that Beam’s shareholders approve, and that there are no objections from regulatory authorities.
Both Suntory and Beam said the acquisition will create a more powerful global player in premium spirits “with annual net sales of spirits products exceeding $4.3 billion.”
Suntory and Beam will have an impressive range of products
The merged companies will have an impressive portfolio of beverages, including:
Beam’s
- Jim Beam (bourbon)
- Knob Creek (bourbon)
- Maker’s Mark (bourbon)
- Laphroaig (Scotch whisky)
- Teacher’s (Scotch whisky)
- Canadian Club (whisky)
- Courvoisier (cognac)
- Pinnacle (vodka).
- Sauza (tequila)
Suntory’s
- Hakushu (Japanese whisky)
- Hibiki (Japanese whisky)
- Kakubin (Japanese whisky)
- Yamazaki (Japanese whisky)
- Bowmore (Scotch whisky)
- Midori (melon liqueur).
Matt Shattock, Beam’s current President and Chief Executive Officer, will continue leading the business from Beam’s headquarters in Chicago, Illnois, as will the company’s present management team.
President and Chairman of Suntory’s 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.”
Matt Shattock said:
“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. 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.”
Suntory and Beam already work together
Suntory and Beam have been working together for quite a while. Suntory distributes Beam beverages in Japan and Beam sells Suntory’s drinks in Singapore and other parts of Asia.