Suntory to Acquire Beam in $16 Billion Deal

Creates world's No. 3 premium spirits player with portfolio of leading brands

Jim Beam

OSAKA, Japan & DEERFIELD, Ill. -- Suntory Holdings Ltd. and Beam Inc. have entered into a definitive agreement under which Suntory will acquire all outstanding shares of Beam for approximately $16 billion, including the assumption of Beam's outstanding net debt.

The transaction, which has been unanimously approved by each company's board of directors, is expected to close in second-quarter 2014, subject to Beam stockholders' approval, regulatory approvals and other customary closing conditions.

The transaction will create a stronger global player in premium spirits with annual net sales of spirits products exceeding $4.3 billion. Its combined portfolio of leading brands will include Beam's Jim Beam, Maker's Mark and Knob Creek bourbons, Teacher's and Laphroaig Scotch whiskies, Canadian Club whisky, Courvoisier cognac, Sauza tequila and Pinnacle vodka and Suntory's leading Japanese whiskies Yamazaki, Hakushu, Hibiki and Kakubin, Bowmore Scotch whisky and Midori liqueur.

Beam's president and CEO Matt Shattock and the current Beam management team will continue to lead the business, which will be managed from Beam's headquarters in Deerfield, Ill., near Chicago.

"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 whisky, the combined company will have unparalleled expertise and portfolio breadth in premium whisky, which is driving the fastest growth in Western spirits," said Shattock.

"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," he said.

Suntory and Beam aim to achieve growth in markets worldwide, including the United States, the world's largest spirits market, by leveraging a combined portfolio of strong brands, an expanded distribution network and fully sharing production and quality-control know-how.

Suntory and Beam already have a successful business relationship under which Suntory distributes Beam products in Japan and Beam distributes Suntory's products in Singapore and other Asian markets.

Suntory intends to fund the transaction through a combination of cash at hand and financing provided by The Bank of Tokyo-Mitsubishi.

Founded in Osaka, Japan, in 1899, Suntory Group is Japan's leading player in alcoholic and nonalcoholic beverages, with 2012 sales of $17.6 billion. Beam worldwide generated 2012 sales of $2.5 billion.