Cheers! Suntory Acquires Beam Creating Spirits Powerhouse

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Suntory Holdings will acquire Beam Inc (BEAM) for ~$13.6b in cash or $83.50 per share, representing a 25% premium to Friday’s close. Beam, owner of Jim Beam, Makers Mark, Canadian Club and more, is the largest US based spirits maker and the combination with Suntory will create the third largest spirits player in the world. The deal has been approved by both boards and is expected to close sometime in Q2 although various other approvals (shareholders, regulators etc.) are still required. Suntory is family owned, however, its non-alcoholic beverage business (of which it owns 60%), Suntory Beverage and Food (OTC:STBFY), is listed in Japan.

Readers of this site might remember that Beam was formed after the breakup of Fortune Brands in late 2011. Fortune was pressured to break itself up by Pershing Square’s Bill Ackman (who remains a large BEAM shareholder) and soon afterwards the company spun off Fortune Brands Home & Security (FBHS) and sold off its golf business, Acushnet, to Korean buyers. Sticking with its spirits business, Fortune then changed its name to Beam Inc and also changed its ticker to the eponymous BEAM. This spinoff has turned out to be a huge winner for investors in both the parent and the spin, although even without an acquisition premium FBHS has so far outperformed. Beam investors can now move on or if interested in following the situation more closely, can check out sites focused on merger arb.

Disclosure: Author holds no position in any stock mentioned.

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