The acquisition of the world's fourth largest spirit company,
), by Japanese beverage company, Suntory Holdings Ltd., moved a
step forward after the U.S. Federal Trade Commission gave an
important regulatory approval. The transaction will expectedly
close in April.
The Deerfield, Ill.-based spirit maker yesterday announced
that the U.S. Federal Trade Commission has granted an early
termination of waiting period for review of the transaction under
the Hart-Scott-Rodino Act, also known as HSR Act.
The HSR Act restricts companies in completing certain mergers,
acquisitions and transfer of assets or securities, until they
have duly filed all the documents with the U.S. Federal Trade
Commission and Department of Justice.
Hence, as of now, Beam has to get the nod from the European
Union and final approval from its shareholders. Management has
called for a special meeting of stockholders on Mar 25, 2014 for
approval of the transaction.
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 #3 (Hold). A
better-ranked brewer worth consideration is
Constellation Brands Inc.
) with a Zacks Rank #2 (Buy).
BEAM INC (BEAM): Free Stock Analysis Report
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