Suntory to Buy Beam for USD 13.6 Billion

Suntory Holdings Limited, Japan’s primary alcoholic drinks maker, announced on 13 Jan 2014 its bid to acquire Beam Inc. a move which would see Suntory become the world’s third largest spirits maker.

Beam Inc. which is currently the world’s fifth largest manufacturer was initially tendered an offer of 13.6 billion US dollars but if the takeover is successful the total cost incurred by Suntory inclusive of outstanding debt belonging to Beam is expected to amount to somewhere in the region of 16 billion US dollars. The deal is expected to be finalized sometime in the second quarter of this year subject to the approval of shareholders and relevant regulatory bodies.

The merger will bring together both Beam’s and Suntory’s brands, which include Jim Beam, Maker’s Mark, Knob Creek, Courvoisier, Suaza, Yamazaki, Hakushu, Hibiki, Kakubin, Bowmore Scotch and Midori. In Suntory’s estimation the deal is expected to create a corporation with annual sales of more than 4.3 billion US dollars.

Shifting demographics and a dwindling target market has prompted Suntory to seek greener pastures. The acquisition of Beam Inc. will be another feather in the cap of Suntory’s recent overseas expansion and demonstrates the company’s foresight in coping with the senescence of the Japanese population and dwindling birth rates. With the completion of this takeover later this year, Suntory will increase its US market share from less than 1% to 11%.