Japan's Suntory to buy U.S. spirits maker Beam for $13.6 billion cash

Mon Jan 13, 2014 7:33pm EST
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By Martinne Geller and Olivia Oran

LONDON/NEW YORK (Reuters) - Suntory Holdings Ltd SUNTH.UL on Monday said it would buy U.S. spirits company Beam Inc BEAM.N for $13.6 billion cash in a deal that would make the Japanese company the world's third-largest spirits maker.

Including the assumption of Beam's net debt, the deal is valued at $16 billion. It brings together Beam's Jim Beam and Maker's Mark bourbons, Courvoisier cognac and Sauza tequila with Suntory's Yamazaki, Hakushu, Hibiki and Kakubin Japanese whiskies, Bowmore Scotch whisky and Midori liqueur.

Once the acquisition is completed, Suntory will become the third largest whiskey company and the fifth largest malt whiskey company by volume, according to International Wine & Spirit Research.

The deal is the latest example of how Japanese beverage companies are seeking to quench their thirst for overseas growth as the population in their home market shrinks.

"All Japanese beverage companies have been focused on getting growth outside Japan," said Bernstein Research analyst Trevor Stirling.

The deal boosts Suntory's market share in the U.S. to 11 percent from less than 1 percent, according to Stifel Nicolaus analyst Mark Swartzberg.

The proposed acquisition is also Japan's third-largest announced outbound deal of all time, according to Thomson Reuters data.

Last year, privately held Suntory floated its food and non-alcoholic drinks company, Suntory Beverage & Food (2587.T: Quote), to raise money for overseas acquisitions. Kirin Holdings Co (2503.T: Quote) bought control of Brazil's Schincariol for $2.6 billion in 2011, and Asahi Group Holdings (2502.T: Quote) took a stake in Chinese brewery Tsingtao in 2009.   Continued...

Bottles of Suntory Holdings single cask whisky are displayed at its Yamazaki Distillery in Shimamoto town, Osaka prefecture December 15, 2013. REUTERS/Sophie Knight