The U.S. owner of the Canadian Club and Alberta Premium whisky brands is poised to merge with a Japanese liquor giant to form the world’s third-biggest spirits company.
Osaka’s Suntory Holdings on Monday announced it will buy all shares of Chicago-based whisky and bourbon giant Beam Inc. for $83.50 per share, for a total transaction value of $16 billion (all figures US$).
“I believe this combination will create a spirits business with a product portfolio unmatched throughout the world and allow us to achieve further global growth,” Suntory president Nobutada Saji said in a release.
“This is a very exciting development that delivers substantial value for our stockholders and creates an even stronger global company with an excellent platform for future growth,” Beam CEO Matt Shattock, who will continue to lead the business from Deerfield, Ill., said in the same release.
“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.”
Among those, the Canadian Club brand dates back to 1858, when grain merchant Hiram Walker set up his distillery at Walkerville, Ont., now part of Windsor.
The brand, first known as Club, became Canadian Club under an order from a pre-Prohibition U.S. government that required all Canadian distillers to put the country of origin on the product label.
The brand came to Beam’s hands in 2005 as part of a $5 billion deal by its then-parent Fortune Brands for over 20 products previously made by Allied Domecq and Pernod Ricard, shortly after the latter company’s takeover of Allied.
Beam Inc. formed in 2010 as Fortune Brands spun the Beam business into a publicly-traded spirits manufacturer. The company has also owned the Alberta Premium whisky brand — a product of Calgary-based Alberta Distillers — since 2010.
Suntory, which dates back to 1899 and today is Japan’s top beverage company in both the alcoholic and non-alcoholic sectors, has been in expansion mode in recent years, buying New Zealand’s Frucor and France’s Orangina Schweppes Group in 2009 and GlaxoSmithKline’s Lucozade and Ribena brands in 2013.
The deal, which includes assumption of Beam’s outstanding net debt, is expected to close in the second quarter of 2014. It already has approval from both companies’ boards of directors, but still requires regulatory approval and a Beam shareholders’ vote.
The companies’ combined spirits portfolios are expected to produce over $4.3 billion in sales per year, also including Beam’s Jim Beam, Maker’s Mark and Knob Creek bourbons, Teacher’s and Laphroaig scotches, Courvoisier cognac, Sauza tequila, Pinnacle vodka and Gilbey’s gin, rum and vodka, and Suntory’s Yamazaki, Hakushu, Hibiki, and Kakubin whiskies, Bowmore scotch and Midori liqueur.
The deal would boost Suntory’s market share in the U.S. to 11 per cent from less than one per cent, Stifel Nicolaus analyst Mark Swartzberg told Reuters, which also reported that the deal, if completed, would be Japan’s third-largest announced outbound deal ever. –– AGCanada.com Network