As the latest example of how Japanese drinks firms are expanding into overseas markets as a result of a shrinking domestic population, Santory Holdings Ltd. SUNTH.UL has agreed to pay $16 billion in cash for Beam Inc. as well as assume the company’s net debt. Suntory will pay $83.50 per share in cash – a 25% premium on Beam’s closing price of $66.97 on Friday, January 10th. The price is 20 times Beam’s earnings before interest, tax, depreciation, and amortization – nearing the record of 20.8 times that Pernod Ricard paid for Absolut Vodka in 2008. Suntory will fund the transaction through a combination of cash on hand and fully committed financing from the Bank of Tokyo-Mitsubishi UFJ. Suntory and Beam already have a working business relationship. Suntory distributes Beam products in Japan, and Beam distributes Suntory products in Singapore and other Asian markets. The acquisition will bring together Beam’s Jim Beam, Maker’s Mark bourbons, Courvoisier cognac, and Sauza tequila with Suntory’s Yamazaki, Hakushu, Hibiki, and Kakubin Japanese whiskies, Bowmore Scotch whiskey and Midori liqueur.
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