Japan’s Suntory Holdings said it would buy U.S. spirits company Beam Inc, the maker of the bourbons Jim Beam and Maker's Mark. The companies jointly announced that they have entered into a definitive agreement under which Suntory will acquire its counterpart for $16 billion, including the assumption of Beam’s net debt.
This sum represents a 25% premium to Beam’s closing price on January 10, 2014. It is also a multiple of more than 20 times Beam’s EBITDA1 for the 12-month period. Beam’s board of directors approved the transaction. Meanwhile, Suntory said Beam’s Chief Executive Officer Matt Shattock and the current management team will continue to lead the business. According to MarketWatch, as the result of the merger of two giants, a new company will be created with annual sales exceeding $4.3 billion. It will manage such leading brands as Courvoisier, Sauza, Bowmore Scotch, and Midori.
The deal is the biggest ever struck by Suntory, which is usually called the main producer of Jim Beam in Japan. The New York Times said Suntory had begun weighing a deal for Beam in the second half of 2011, but announced of it only now.
Beam Inc was founded in 2011as a result of the sale of assets of Fortune Brands (former American Brands till 1997).
