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Suntory swallows Jim Beam maker

AFP-JIJI

Suntory Holdings said Thursday it had completed its nearly $16 billion buyout of the company behind Jim Beam bourbon, creating the world’s third-largest maker of high-end spirits and giving it a foothold in the U.S. liquor market.

Suntory has acquired all outstanding shares of Beam Inc. for $13.8 billion while taking on $2.0 billion of the U.S.-based firm’s debt.

The combined company, with about 3,400 employees, will be called Beam Suntory Inc. and is set to merge with Suntory Liquors’ spirits business by the end of this year.

Beam Inc. and Suntory’s spirits business generated combined sales of $4.6 billion in 2013, according to a statement issued by Suntory.

The buyout, first announced in January, marks the latest foreign acquisition by Suntory and is part of an ongoing trend of companies venturing beyond their home market and its shrinking population in search of growth markets abroad.

The Beam deal is Japan Inc.’s third-biggest overseas buy after mobile carrier Softbank Corp.’s $21.6 billion takeover of U.S.-based Sprint Nextel last year and Japan Tobacco’s 2007 purchase of Britain’s Gallaher for almost $19 billion.

It also eclipsed Suntory’s previous acquisitions, including the $1.56 billion purchase of the Lucozade and Ribena soft drinks brands in September.

“The transaction creates a company with the strong No. 3 position in the global premium spirits market,” Suntory said in a statement Thursday.

Beam markets a range of bourbons and internationally known whiskies, having evolved from a small family base in the state of Kentucky.

Beam Suntory will be headquartered in Deerfield, Illinois and led by chairman and chief executive officer Matt Shattock, who has been chief executive of Beam since 2009.

“By combining the world leader in bourbon and Japan’s leading spirits company, we have created a stronger global business with an even better premium portfolio,” he said.

Suntory, one of Japan’s biggest brewers and makers of nonalcoholic drinks, is widely known in Japan for featuring Hollywood movie stars in its commercials, including Tommy Lee Jones. Its eponymous whisky played a side roll in the 2003 Bill Murray film “Lost in Translation.”

Company President Nobutada Saji last year told the Nikkei business daily that Suntory was eyeing a deal that would amount to a “once-in-a-lifetime gamble.”

But some analysts have warned that the merger will burden the Japanese drinks giant with heavy debt. Suntory is financing the deal with nearly $8 billion in bank loans and took on an additional $2 billion in debt via the acquisition.

Suntory, which scrapped plans to merge with larger Japanese rival Kirin in 2010, has since formed a joint venture with Chinese brewer Tsingtao to expand its reach in China, the world’s biggest beer market, and bought a 51 percent stake in a unit of Indian food and drink maker Narang Group.

  • Ben Hennessy

    For a relaxing buyout, make it a Suntory buyout.