Suntory to form super group with $16bn Beam
13 January, 2014
Suntory has announced it will pay $16 billion to acquire Beam in a deal that would see the Japanese group become one of the top-three spirits manufacturers in the world.
The groups, which have been tied by existing distribution agreements in Asia, have entered into a deal by which Suntory will pay a 25% premium on Beam's share price.
The combined group's portfolio will comprise brands with annual net sales of $4.3bn and will include Beam's Jim Beam, Maker's Mark, Knob Creek, Teacher's, Laphroaig, Canadian Club, Courvoisier, Sauza, Pinnacle, and Suntory's Yamazaki, Hakushu, Hibiki, Kakubin, Bowmore and Midori.
The transaction has been unanimously approved by each company's board of directors and is expected to close in the second quarter of 2014, subject to Beam stockholders' approval, regulatory approvals and customary closing conditions.
Matt Shattock, president and chief executive officer of Beam "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
"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."
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."
Suntory's Beam move is just round one
Suntory's acquisition of Beam "is not the end of it by any means", leading drinks analyst Jeremy Cunnington of Euromonitor International has told DI.
Suntory and Beam jointly announced today that a deal has been struck for $16bn.
Cunnington said: "I think the major international spirits companies will try to put a counter bid together. CEOs of all the major companies will be humming with this news. Pernod Ricard in particular and a number of other companies will not give up without a fight. Pernod says they want to pay off their debt but they will not pass up the opportunity."
According to a joint statement from Beam and Suntory, the deal has been agreed by the companies' board of directors but will not be completed until the second quarter of 2014 as it is subject to "Beam's stockholders' approval, regulatory approvals and customary closing conditions".
"Agreed does not mean it' signed, sealed and delivered. It is subject to approval," said the Euromonitor International drinks analyst.
In the event of a counter bid, Cunnington said "Beam would have to be split up".
"There would be competition issues for many of the groups - for instance Pernod taking Larios. William Grant & Sons are cash rich and it would be a great chance to get a cognac (Courvoisier)," he said.
"For Rémy Cointreau there are competition issues with Courvoisier but they'd be interested in getting a small batch bourbon like Knob Creek. Diageo would be keen on Maker's Mark. They have Bulleit but it is 20% of the size of Maker's Mark," he said.
Cunnington said Suntory's motivation for the acquisition was to broaden its portfolio and move away from a domestic focus.
Beam Suntory is formed
01 May, 2014
Suntory Holdings has completed the acquisition of Beam, which will now be called Beam Suntory.
Suntory Liquors Limited, which includes Yamasaki, Hakushu, Hibiki, Kakubin, Bowmore and Midori, will be folded into the new Beam Suntory by the end of this year.
Suntory paid $83.50 per share of Beam. The combined Beam Suntory now the takes the number three position in the global premium spirits market, the company claims.
Beam Suntory will be headquartered in Deerfield, Illinois and led by Chairman and Chief Executive Officer Matt Shattock, who has been CEO of Beam since 2009.
Beam Suntory aims to achieve growth in markets worldwide, particularly the US with its strengthened global distribution network.
Matt Shattock, chairman & CEO of Beam Suntory said: "By combining the world leader in bourbon and Japan's leading spirits company, we have created a stronger global business with an even better premium portfolio.
"The company's portfolio is led by its flagship brands Jim Beam and Yamazaki, as well as world renown premium brands including Maker's Mark, Knob Creek, Hakushu, Hibiki, Kakubin, Teacher's, Laphroaig, Bowmore, Canadian Club, Courvoisier, Sauza, Pinnacle and Midori.
"We will be focused on continuing our momentum, growing in developed and emerging markets, and building on our combined strengths. Those strengths include a dynamic portfolio across key categories, powerful routes to market and passionate people.
"I'm particularly excited about what brings us together - a strong cultural fit based on the entrepreneurial and innovative spirit of two companies with common values and proud heritages rooted in multi-generational family businesses. We look forward to learning from each other and to creating a future of exciting growth for our business and opportunities for our people."
Nobutada Saji, president and chairman of Suntory Holdings, said: "I am very delighted with the launch of Beam Suntory, which unites Beam and Suntory's spirits businesses, and I truly believe Beam Suntory will continue to grow strongly in the global spirits industry.
"Since its founding, Suntory Group has always shared the spirit of 'Yatte Minahare - Go for it!' in taking on new challenges, creating new opportunities, and living our corporate values. Beam's heritage of over 200 years is also characterized by a spirit of entrepreneurialism, creativity and courageous decisions that exemplify the same 'Yatte Minahare' spirit.
"I believe this common spirit and our combined strengths will be a powerful driving force as the new Beam Suntory excites consumers around the world with our portfolio of premium brands. At the same time, Beam Suntory will remain true to Suntory's corporate philosophy, 'In Harmony with People and Nature,' in developing a rich experience of life based on real needs in the communities in which we do business, coexisting with people and their nature surroundings.