Beam Inc. to Be Acquired By Japan’s Suntory for $16 Billion

LEXINGTON, Ky. (Lexington Herald-Leader/MCT) -

Beam Inc., the parent company of Kentucky bourbons Jim Beam, Maker’s Mark and other premium brands, announced Monday a merger with Japanese spirits and beverage company Suntory Holdings Ltd.

Suntory will acquire Deerfield, Ill.-based Beam in a deal valued at $16 billion, or $83.50 a share, 25 percent above the stock’s closing price Friday, the companies said in a joint news release.

The transaction was unanimously approved by both companies’ boards of directors and is expected to close in the second quarter, subject to the approval of Beam shareholders and regulators.

The deal would create a global spirits portfolio with annual net sales of $4.3 billion, according to the announcement. Brands include Beam’s Jim Beam and the Beam family; Maker’s Mark and Knob Creek bourbons; Teacher’s and Laphroaig Scotch whiskies; Canadian Club whiskey; Courvoisier cognac; Sauza tequila; Pinnacle vodka and assorted flavored extensions. Suntory’s brands include Japanese whiskeys Yamazaki, Hakushu, Hibiki and Kakubin; Bowmore Scotch; and Midori liqueur.

According to the news release, Beam president and CEO Matt Shattock and the current Beam management team will stay on, and Beam’s brands will continue to be managed from Beam headquarters outside Chicago.

“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,” Shattock said in the news release. “Together, we will be a global leader in distilled spirits, with the No. 3 position in premium spirits and a dynamic portfolio across key categories. With particular strength in bourbon, Scotch, Canadian, Irish and Japanese whiskey, the combined company will have unparalleled expertise and portfolio breadth in premium whiskey, 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,” Shattock said. “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.”

Nobutada Saji, president and chairman of Suntory’s board, said, “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.”

Beam and Suntory already had partnered on distribution in Asian markets.

When final, the sale will mean three major Kentucky bourbon distilleries will be Japanese-owned – Jim Beam, Maker’s Mark and Four Roses, which is owned by Kirin. A fourth, Wild Turkey, is owned by the Italian spirit company Campari. Of the major players, Louisville, Ky.-based Brown-Forman is publicly traded, with majority ownership held by family members, and Heaven Hill is owned by the Shapira family of Louisville and Bardstown, Ky.

“Today’s announcement is further proof that Kentucky bourbon is a growing and global force in the spirits marketplace,” Eric Gregory, president of the Kentucky Distillers’ Association, said in a statement.

Osaka, Japan-based Suntory notched sales of $17.6 billion in 2012. In addition to its Japanese whiskeys, Suntory has grown the non-alcoholic side of its business, acquiring New Zealand beverage company Frucor Group and French beverage company Orangina Schweppes Group in 2009, and GlaxoSmithKline’s Lucozade and Ribena drink brands in 2013.

Beam, which was spun off as a standalone company from Fortune Brands in 2011, had 2012 sales of $2.5 billion. In addition to the Beam family of brands, the company owns several others, including Cruzan rum, Hornitos tequila, Kilbeggan Irish whiskey, Larios gin, Whisky DYC and DeKuyper cordials.