Suntory Completes $16 Billion Beam Acquisition

April 30, 2014 – Japan’s Suntory Holdings has officially completed its $16 billion (USD) acquisition of Beam, Inc., creating the world’s third-largest spirits company with significant presence in Bourbon, Canadian, Irish, and Scotch whiskies as well as Suntory’s Japanese whisky business. The deal closed after the end of New York trading today, with Beam shareholders receiving $83.50 per share in cash in the company’s final day of trading.

As projected in a Japan News story last week, the new company will be called Beam Suntory and be headquartered at Beam’s current headquarters in the Chicago suburb of Deerfield, Illinois. Matt Shattock will be Chairman and Chief Executive Officer of the combined company, which will take over responsibility for Suntory Liquors Limited’s existing spirits portfolio by the end of 2014. In a news release, Shattock said the new company will leverage its entire portfolio globally with a strengthened distribution system.

“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.”

Suntory Holdings is privately held by Japan’s Saji family. Chairman and President Nobutada Saji sought to broaden the company’s base outside of its traditional market in Japan, and acquiring Beam accomplishes that goal. The combined sales of both companies pre-merger during 2013 was $4.6 billion (USD), placing Beam Suntory behind only Diageo and Pernod Ricard in global spirits sales. In the company’s news release, Saji predicted the union of Beam and Suntory will lead to continued growth.

“Since its founding, Suntory Group has always shared the spirit of ‘Yatte Minahare – Go for it!’ in taking on new challenges, creating new opportunities, and living our corporate values.  Beam’s heritage of over 200 years is also characterized by a spirit of entrepreneurialism, creativity and courageous decisions that exemplify the same ‘Yatte Minahare’ spirit.  I believe this common spirit and our combined strengths will be a powerful driving force as the new Beam Suntory excites consumers around the world with our portfolio of premium brands. At the same time, Beam Suntory will remain true to Suntory’s corporate philosophy, ‘In Harmony with People and Nature,’ in developing a rich experience of life based on real needs in the communities  in which we do business, coexisting with people and their nature surroundings.”

While the Beam Suntory news release does not directly address the issue, Suntory’s Morrison Bowmore Distillers unit in Scotland will be included in the new Beam Suntory structure. The new company’s web site lists all of Morrison Bowmore’s single malt brands (Bowmore, Auchentoshan, Glen Garioch, and McClelland’s) under the Beam Suntory portfolio. Suntory acquired Morrison Bowmore from the Morrison family in 1984, and had operated the company as a standalone unit reporting to company executives in Tokyo. In an email tonight, Beam Suntory spokesman Clarkson Hine confirmed that the Morrison Bowmore brands will be a key part of the new company’s future plans.

This transaction has created an even stronger Scotch portfolio, with Bowmore, Auchentoshan and McClelland’s an excellent complement to Laphroaig, Ardmore and Teacher’s. Premium Scotch is one of the most attractive global spirits categories and we have ambitious growth plans in Scotch. While it’s premature to discuss the specifics of integration matters, I can tell you we plan to take a very careful and thoughtful approach and learn from each other. Current operations will continue as they are for the time being, and we will now begin the important task of bringing the operations of two great companies together while maintaining the momentum of the business.

The merger would give Beam Suntory control of two of Islay’s eight currently working distilleries at Bowmore and Laphroaig, but that did not raise any competition concerns among regulators. Diageo also owns two Islay distilleries (Lagavulin and Caol Ila), while the remaining distilleries are independently owned, and it is possible that owning two distilleries on the island may generate some cost savings through joint procurement for malted barley and other supplies.

Editor’s note: This story was updated with additional information. 

Links: Beam Suntory