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Suntory Holdings
to acquire Beam for £9.7 Billion
creating the world's third-largest maker
of distilled drinks.
Japanese spirits producer Suntory
Holdings have announced that they have
entered an agreement to buy US spirits
producer Beam Inc, paying £8.27 (US$13.6
billion) in cash for the shares to make
the Japanese company the world's
third-largest maker of distilled drinks.
Including the assumption of Beam's debt,
the deal is worth £9.7 billion (US$16
billion) and is expected to close in the
second quarter of the year.
The acquisition brings together Beam's
portfolio which includes 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 with Suntory's Yamazaki, Hakushu,
Hibiki and Kakubin Japanese whiskies,
Bowmore, Auchentoshan, Glen Garioch
Scotch whiskies and Midori liqueur.
Under the agreement Suntory will acquire
all outstanding shares of Beam for
US$83.50 per share in cash or total
consideration of approximately US$16
billion, including the assumption of
Beam’s outstanding net debt. 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 EBITDA1 for the 12-month period
ended September 30, 2013.
The two already had a business
relationship under which Suntory
distributes Beam products in Japan and
Beam distributes Suntory's products in
Singapore and other Asian markets.
Nobutada Saji, President and Chairman of
Suntory’s Board, 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."
On completion of the transaction,
Suntory and Beam aim to achieve growth
in markets worldwide, including the
United States, the world’s largest
spirits market , by leveraging a
combined portfolio of strong brands, an
expanded distribution network and fully
sharing production and quality control
know-how.
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