Japan's Suntory to pay $13.6B US for Beam spirits maker
Stock in distiller of Jim Beam and Maker's Mark bourbon jumps 24%
Beam, the maker of Jim Beam and Maker's Mark bourbons along with other liquor brands, has agreed to be acquired by Japan's Suntory Holdings Ltd. for approximately $13.62 billion.
Shares of the spirits maker jumped in 24 per cent in Monday trading to $83.08.
Suntory has a portfolio of spirits, with whiskies including Yamazaki and Hakushu as well as Midori liqueur and other beverages. It already distributes Beam's products in Japan. Beam distributes Suntory's products in Singapore and other Asian markets.
After the deal closes, it will be the world's third largest spirits company with sales of more than $4.3 billion.
Suntory president and chairman Nobutada Saji said in a statement that the acquisition will help Suntory further its global growth.
Beam President and CEO Matt Shattock and the Deerfield, Ill., company's current management will continue to run the business.
In the U.S., sales volume for bourbon and Tennessee whiskys such as Jack Daniels has grown 26 per cent over the past decade, according to the Distilled Spirits Council, an industry group. Exports of U.S. whiskys has grown to roughly $1 billion last year, more than double what it was a decade ago.
Demand is so robust that Beam last year even considered reducing the alcohol content for Maker's Mark because of a supply shortage. The company scrapped the idea after a backlash by fans of the higher-end bourbon.
"We're basically in the middle of a global whisky renaissance," said Frank Coleman, a spokesman for the Distilled Spirits Council.
Suntory will pay $83.50 per share, a 25 per cent premium to Beam's Friday closing price of $66.97. The companies put the deal's value at about $16 billion, including debt.
Suntory plans to fund the deal with available cash and fully committed financing from The Bank of Tokyo-Mitsubishi UFJ.
Both companies' boards unanimously approved the transaction, which is targeted to close in the second quarter.
The deal needs approval from Beam Inc. stockholders.
Beam's stock gained $17.40, or 26 per cent, to $84.37 in premarket trading about 90 minutes before the market open.