- Beam Stockholders to Receive $83.50 Per
Share in Cash
- Agreement Represents a Premium of 25%
Over the Closing Price on January 10, 2014 and a Multiple of More
Than 20 Times Beam’s Latest 12 Months’ EBITDA1
- Creates the World’s #3 Premium Spirits
Player with Portfolio of Leading Brands Across Key Spirits
Categories, Enhanced Global Reach and Unparalleled Expertise in the
Fast-Growing Whisky Category
Suntory Holdings Limited and Beam Inc. (NYSE: BEAM) today
jointly announced that they have entered into a definitive
agreement under which Suntory will acquire all outstanding shares
of Beam for US$83.50 per share in cash or total consideration of
approximately US$16 billion, including the assumption of Beam’s
outstanding net debt. The transaction consideration represents a
25% premium to Beam’s closing price of $66.97 on January 10, 2014;
a 24% premium to the volume-weighted average share price over the
last three months; and a multiple of more than 20 times Beam’s
EBITDA1 for the 12-month period ended September 30, 2013.
The transaction, which has been unanimously approved by each
company’s board of directors, is expected to close in the second
quarter of 2014, subject to Beam stockholders’ approval, regulatory
approvals and other customary closing conditions.
The transaction will create a stronger global player in premium
spirits with annual net sales of spirits products exceeding $4.3
billion. Its combined portfolio of leading brands will include
Beam’s Jim Beam, Maker’s Mark and Knob Creek bourbons, Teacher’s
and Laphroaig Scotch whiskies, Canadian Club whisky, Courvoisier
cognac, Sauza tequila, and Pinnacle vodka, and Suntory’s leading
Japanese whiskies Yamazaki, Hakushu, Hibiki, and Kakubin, Bowmore
Scotch whisky and Midori liqueur. Beam’s President and Chief
Executive Officer Matt Shattock and the current Beam management
team will continue to lead the business, which will be managed from
Beam’s headquarters outside Chicago, Illinois.
Nobutada Saji, President and Chairman of Suntory’s Board, said,
“I am delighted that we can announce this agreement with Beam, a
company with a portfolio of leading global brands, including Jim
Beam and Maker’s Mark, and a strong global distribution network. 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. We are particularly excited about
the prospect of working more closely with Beam’s excellent
management and employees who will play an integral part in the
growth of the business.”
Unparalleled Breadth
in the Fast-Growing Whisky Category
“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,” said Matt
Shattock, President and Chief Executive Officer of Beam Inc.
“Together we will be a global leader in distilled spirits with the
#3 position in premium spirits and a dynamic portfolio across key
categories. 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.
“Our combined global routes to market will expand our joint
distribution footprint, and the powerful innovation capabilities
both companies have developed will be a significant advantage,”
Shattock continued. “Backed by the expertise and the financial
resources of Suntory, the people of Beam look forward to working
with the Suntory team to continue outperforming our global market
and to building on the proud traditions and deep heritage of our
brands across all the major spirits categories.”
On completion of the transaction, Suntory and Beam aim to
achieve growth in markets worldwide, including the United States,
the world’s largest spirits market2, by leveraging a combined
portfolio of strong brands, an expanded distribution network and
fully sharing production and quality control know-how.
Suntory and Beam already have a successful business relationship
under which Suntory distributes Beam products in Japan and Beam
distributes Suntory’s products in Singapore and other Asian
markets.
Creating Substantial
Value for Beam Stockholders
“The attractive valuation which has been achieved for Beam
stockholders is a result of the successful strategy and excellent
execution by the worldwide Beam team,” said Beam Chairman David
Mackay. “Indeed, Beam will have achieved a total shareholder return
of 106%3 since Beam became a standalone spirits company in October
of 2011.”
Suntory intends to fund the transaction through a combination of
cash at hand and fully committed financing provided by The Bank of
Tokyo-Mitsubishi UFJ. Mitsubishi UFJ Morgan Stanley is acting as
exclusive financial advisor to Suntory and Cleary Gottlieb Steen
& Hamilton LLP is acting as legal advisor. Centerview Partners
and Credit Suisse are serving as financial advisors to Beam and
Sidley Austin LLP is serving as legal advisor.
About Suntory
Founded in Osaka, Japan in 1899, Suntory Group is Japan’s
leading player in alcoholic and non-alcoholic beverages, with sales
of $17.6 billion (2012)4. Suntory’s alcoholic beverage business
encompasses high-quality brands represented by its flagship single
malt whisky “Yamazaki”, “The Premium Malt’s” beer, wine, and
ready-to-drink (RTD) brands. In recent years, Suntory Whiskies are
becoming increasingly popular among consumers worldwide, as they
gain a reputation for quality, supported by success at some of the
world’s most renowned spirits competitions. Suntory’s non-alcoholic
beverage business is expanding successfully into international
markets and was listed on the Tokyo Stock Exchange in 2013 as
Suntory Beverage & Food Limited. Suntory has supplemented its
organic growth in overseas markets with strategic acquisitions
including New Zealand beverage company Frucor Group and French
beverage company Orangina Schweppes Group in 2009 as well as the
acquisition of GlaxoSmithKline’s Lucozade and Ribena drink brands
in 2013. Suntory Group currently operates in Asia, Oceania, Europe,
the Americas and Africa, with more than 28,000 employees (as of
December 31, 2012). For more information on Suntory, please visit
www.suntory.com
About Beam Inc.
As one of the world’s leading premium spirits companies, Beam is
Crafting the Spirits that Stir the World. Consumers from all
corners of the globe call for the company’s brands, including Jim
Beam Bourbon, Maker's Mark Bourbon, Sauza Tequila, Pinnacle Vodka,
Canadian Club Whisky, Courvoisier Cognac, Teacher's Scotch Whisky,
Skinnygirl Cocktails, Cruzan Rum, Hornitos Tequila, Knob Creek
Bourbon, Laphroaig Scotch Whisky, Kilbeggan Irish Whiskey, Larios
Gin, Whisky DYC and DeKuyper Cordials. Beam is focused on
delivering superior performance with its unique combination of
scale with agility and a strategy of Creating Famous Brands,
Building Winning Markets and Fueling Our Growth. Beam and its
3,400 passionate associates worldwide generated 2012 sales of $2.5
billion (excluding excise taxes), volume of 38 million 9-liter
equivalent cases and some of the industry’s fastest growing
innovations.
Headquartered in Deerfield, Illinois, Beam is traded on the New
York Stock Exchange under the ticker symbol BEAM and is included in
the S&P 500 Index and the MSCI World Index. For more
information on Beam, its brands, and its commitment to social
responsibility, please visit www.beamglobal.com and
www.drinksmart.com.
Cautionary Statement Regarding
Forward-Looking Statements
Certain statements in this press release may
constitute “forward-looking statements” as that term is
defined in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements generally can be identified by the
words “will,” “expects,” “believes” and words or phrases of similar
import. Actual results could differ materially from those projected
or forecast in the forward-looking statements. The factors that
could cause actual results to differ materially include, without
limitation, risks or uncertainties associated with: the
satisfaction of the conditions precedent to the consummation of the
proposed transaction, including, without limitation, the receipt of
stockholder and regulatory approvals; unanticipated difficulties or
expenditures relating to the proposed transaction; legal
proceedings that may be instituted against Beam and others
following announcement of the proposed transaction; disruptions of
current plans and operations caused by the announcement and
pendency of the proposed transaction; potential difficulties in
employee retention as a result of the announcement and pendency of
the proposed transaction; the response of customers, distributors,
suppliers and competitors to the announcement of the proposed
transaction; and other factors described in Beam’s annual report on
Form 10-K for the year ended December 31, 2012 filed with the U.S.
Securities and Exchange Commission (the “SEC”). Suntory and Beam
assume no obligation to update the information in this press
release, except as required by law. Readers are cautioned not to
place undue reliance on these forward-looking statements that speak
only as of the date hereof.
Additional Information and Where to
Find It
This communication may be deemed to be solicitation material in
respect of the proposed acquisition of Beam by Suntory. In
connection with the proposed transaction, Beam intends to file
relevant materials with the SEC, including a proxy statement on
Schedule 14A. SECURITY HOLDERS OF BEAM ARE URGED TO READ ALL
RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING BEAM’S PROXY
STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION. Investors and security holders will be
able to obtain the documents free of charge at the SEC’s web
site, www.sec.gov, and may obtain documents filed by Beam free
of charge from Beam’s website (www.beamglobal.com) under the tab
“Investors” and then under the heading “Investor Info – SEC
Documents.” In addition, the proxy statement and other documents
filed by Beam with the SEC (when available) may be obtained from
Beam free of charge by directing a request to Beam Inc., Office of
the Secretary, 510 Lake Cook Road, Deerfield, Illinois 60015 or
(847) 948-8888.
Participants in
Solicitation
Beam and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the holders of
Beam common stock in respect of the proposed transaction. Security
holders may obtain information regarding Beam and its directors and
executive officers, including their respective names, affiliations
and interests, in Beam’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2012, which was filed with the SEC on
February 26, 2013, and its definitive proxy statement for its 2013
annual meeting of stockholders, which was filed with the SEC on
March 12, 2013. To the extent holdings of Beam securities have
changed since the amounts contained in the definitive proxy
statement for the 2013 Annual Meeting, such changes have been or
will be reflected on Statements of Change in Ownership on Form 4
filed with the SEC. Investors may obtain additional information
regarding the interest of such participants by reading the proxy
statement regarding the proposed transaction when it becomes
available.
1 LTM EBITDA before charges/gains as of September 30, 2013
2 By Value. Excludes local spirits
3 Based on Bloomberg Total Shareholder Return function
4 105 yen/USD
Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20140113005816/en/
Suntory Contacts:Suntory: North America/EuropeSard
Verbinnen & CoJim Barron/Meghan Gavigan,
+1-212-687-8080orSuntory: Japan/AsiaSuntory Holdings LimitedPublic
Relations Department, +81-3-5579-1150 (Japanese)orAshton
ConsultingJohn Sunley/Brendan Jennings, +81-3-5425-7220
(English)mail@ashton.jporBeam Contacts:Beam Inc.Clarkson
Hine, +1-847-444-7515clarkson.hine@beamglobal.comorInvestor
contacts:Beam Inc.Tony Diaz, +1-847-444-7690
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