Bottles of Jim Beam Bourbon make their way down a conveyor belt inside the bottling plant at the Jim Beam Bourbon Distillery on Monday in Clermont, Ky.
By Bill Toland / Pittsburgh Post-Gazette
Pennsylvania's two favorite bourbons soon will be owned by Japan's favorite distiller.
Beam Inc., owner of some of America's most popular bourbon brands, has agreed to a $13.6 billion cash takeover by Japanese beverage titan Suntory Holdings. It's the first big corporate acquisition of 2014 and a signal of the growing popularity of whiskey in general, and bourbon in particular, both domestically and overseas.
The total cash-and-debt value of the deal, should it be approved by Beam's shareholders, is $16 billion and would turn Suntory into the world's third-largest spirits company, giving it ownership of Jim Beam and Maker's Mark bourbons, as well as Courvoisier cognac, Sauza tequila and dozens of other spirits labels.
Beam, based in Deerfield, Ill., owns some of the most popular brands in Pennsylvania -- Jim Beam is the state's third most popular whiskey brand (behind Jack Daniel's and Seagram's) with 1.15 million units sold last fiscal year, according to the state Liquor Control Board, and is one of the top 20 wine and spirits brands overall. Jim Beam Bourbon is also the top-selling bourbon in the state.
Maker's Mark is a top 100 brand in Pennsylvania and saw sales increase nearly 12 percent last year. Beam brands are most popular in the western part of the state (known as region 3 to the PLCB), and its bourbon is a top-10 product by units sold.
All told, Pennsylvanians spent more than $20 million last fiscal year on Jim Beam and Maker's Mark bourbons.
The deal, according to various analyses, would give Suntory 11 percent of the spirits market share in the U.S., up from less than 1 percent.
It also would put yet another American beverage company into foreign hands, reminiscent of Anheuser-Busch's 2008 sales agreement to Belgian-Brazilian brewing company InBev. Of the 10 largest spirits companies worldwide, only Kentucky's Brown-Forman Corp., owner of Jack Daniel's and Southern Comfort, will remain domestically headquartered after the Beam deal is sealed.
Whiskey is the driver of the deal. The acquisition comes at a time when the taste for bourbon -- a type of American whiskey made primarily of corn and historically distilled in Kentucky -- continues to grow domestically and abroad.
In the U.S., sales volume for bourbon and so-called Tennessee whiskeys such as Jack Daniel's has grown 26 percent over the past decade, according to the Distilled Spirits Council, an industry group. Export of U.S. whiskeys has grown to roughly $1 billion last year, more than double what it was a decade ago.
Demand is so robust that Beam last year even considered reducing the alcohol content for Maker's Mark because of a supply shortage. The company scrapped the idea after a backlash by fans of the higher-end bourbon.
"We're basically in the middle of a global whiskey renaissance," said Frank Coleman, a spokesman for the Distilled Spirits Council.
Suntory president and chairman Nobutada Saji said in a statement that the acquisition will help Suntory further its global growth. In recent years, Suntory also has purchased French beverage maker Orangina Schweppes Group and GlaxoSmith Kline's Lucozade and Ribena drinks.
Beam spokesman Clarkson Hine said for now, the deal will result in few changes for fans of Beam's bourbons.
Following the Monday morning news of the takeover, shares of Beam rose $16.45 to $83.42. Suntory -- which owns Yamazaki, Hakushu and Hibiki whiskeys; Bowmore Scotch whisky; and Midori liqueur -- said it would pay $83.50 per share in cash, a 25 percent premium on Beam's Friday stock price of $66.97.
In addition to its namesake brands, Beam also owns Old Grand-Dad, Old Crow, Baker's, Basil Hayden's, Booker's and Knob Creek bourbons; Old Overholt rye (originally a Pennsylvania whiskey, named for the grandfather of Henry Clay Frick); Canadian Club, Laphroaig and Ardmore Scotches; several Irish whiskey brands; and Starbucks-branded liqueurs.
Bill Toland: email@example.com or 412-263-2625. The Associated Press contributed.
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