The acquisition of the world's fourth largest spirit company,
), by Japanese beverage company, Suntory Holdings Ltd., has moved
a step further after the former's shareholders gave their formal
approval yesterday. The transaction will expectedly close by the
end of April.
Prior to this, at the beginning of March, the Deerfield,
IL-based spirit maker got an important regulatory approval from
the U.S. Federal Trade Commission, which granted it an early
termination of waiting period for review of the transaction under
the Hart-Scott-Rodino Act, also known as HSR Act. Hence, as of
now, Beam has to get the nod from the European Union.
The HSR Act restrains companies from completing certain
mergers, acquisitions and transfer of assets or securities, until
all the necessary documents are filed with the U.S. Federal Trade
Commission and Department of Justice.
On Jan 13, Beam had signed a deal to be acquired by Suntory in
an all-cash transaction. Suntory Holdings offered $83.50 per
share to buy all outstanding shares of the American manufacturer
of spirits. The total buyout amount, including Beam's net debt,
is approximately $16 billion.
The Japanese beverage company's offer price is 25% higher than
Beam's closing price of $66.97 on Jan 10. Moreover, the valuation
comes at a multiple of 20 times of Beam's twelve-month earnings
before interest, taxes, depreciation and amortization (EBITDA)
ended on Sep 30 last year and a premium of 24% to the last three
months volume-weighted average share price.
After the deal is sealed, Suntory Holdings will become the
world's third largest whiskey company after
) and Pernod-Ricard SA, and will reap annual revenues of about
The alcoholic beverage industry has been witnessing major
consolidation in recent times. In Jan 2014,
Anheuser-Busch InBev SA/NV
) or AB InBev, in order to strengthen its position in the
Asia-Pacific region, entered into an agreement with KKR and
Affinity Equity Partners to reacquire its South Korean asset -
Oriental Brewery - for a sum of $5.8 billion. Notably, it marked
the second biggest alcohol transaction of 2014 after the
Currently, Beam carries a Zacks Rank #2 (Buy). Another brewer
worth consideration is
) with a Zacks Rank #2.
BEAM INC (BEAM): Free Stock Analysis Report
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ANHEUSER-BU ADR (BUD): Free Stock Analysis
DIAGEO PLC-ADR (DEO): Free Stock Analysis
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