Jim Beam goes to Japanese whiskey giant Suntory in $13.6 billion deal
Suntory, the family-owned Japanese drinks giant, is to buy the American firm Beam, of Jim Beam fame, for about $13.6 billion in cash, creating the world's fourth-largest liquor company by volume.
Three brands going to Suntory
Beam was spun off in late 2011 from Fortune Brands .
The combined company will have annual net sales of spirits exceeding $4.3 billion, said the Wall Street journal.
Its brands will include Beam's Jim Beam, Maker's Mark and Knob Creek bourbons; Courvoisier cognac; Canadian Club whiskey; Sauza tequila, and Skinny Girl drinks,
Suntory already owns Japanese whiskeys Yamazaki, Hakushu, Hibiki, and Kakubin; Bowmore Scotch whisky; and Midori liqueur.
Beam's main attraction for Suntory is its big bourbon business, says the WSJ. led by mass-market Jim Beam but also higher-priced brands such as Maker's Mark and Knob Creek.
"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," said Nobutada Saji, president and chairman of Suntory.
The boards of both companies approved the deal after Suntory approached Beam with an unsolicited offer.
Beam's President and Chief Executive Matt Shattock and the current management will continue to lead the Beam business from the company's headquarters outside Chicago, Suntory said.
Suntory is "not planning to scale down the operating base [of Beam] and also not planning to dramatically cut the number of workers,'' said Naoko Tsuda, a Suntory spokeswoman in Tokyo.
Instead, the Journal reported, citing Ms Tsuda,the Japanese company hopes to use Beam for a "major offensive'' in the global markets—particularly Japan, the U.S., Australia, Europe and the emerging markets.
Will another liquor company make a counter bid for Beam. Diageo and France's Pernod Ricard the largest and second-largest liquor companies by revenue, had long been considered as potential bidders for Beam, said the WS J.
A person close to Diageo said the company might consider buying Beam, but the chances of a counterbid were low because the U.K. company was unlikely to match Suntory's offer.
Of a possible bid for Beam, Diageo Chief Executive Ivan Menezes recently said the company would focus on its existing U.S. portfolio instead. "We don't need it,"Menezes said at a November investor conference.