It is "business as usual" at Cruzan Rum after its corporate owner, Beam Inc., was acquired by the Japanese spirits company Suntory Holdings, an official at Beam’s Deerfield, Ill., headquarters said Tuesday.
Suntory and Beam announced the agreement Monday. Under the deal, Suntory will acquire all outstanding shares of Beam in a deal worth an estimated $16 billion, creating the third largest spirits company in the world.
"It’s business as usual at Beam and at Cruzan, and we’re proud to be the longtime foundation of the Virgin Islands rum industry," said Clarkson Hine, Beam’s senior vice president of corporate communications and public affairs. "The Beam management team will continue to lead the business and we anticipate our operations will continue as they are. Our brands will continue to be made with all the heritage and authenticity they’ve always had."
Hines said the company was an attractive acquisition for Suntory because of its people, culture and how it operates, and that the company wouldn’t want to change that.
"Suntory has indicated that it wants us to keep doing what we’ve been doing," he said.
Under the transaction announced Monday, Suntory will pay $83.50 a share for all outstanding shares of Beam Inc. That represents a 25 percent premium to Beam’s closing price of $66.97 on Friday.
The transaction has been unanimously approved by each company’s board of directors and is expected to close in the second quarter of 2014, subject to Beam stockholders’ approval and regulatory approvals.
The transaction will create a company 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, along with Cruzan Rum and Suntory’s leading Japanese whiskies 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, according to the statement issued Monday by the two companies.
Nobutada Saji, president and chairman of Suntory’s board, said Beam’s brands and global distribution network "will create a spirits business with a product portfolio unmatched throughout the world and allow us to achieve further global growth."
In an analysis of the deal, the Reuters News Service said the acquisition is "the latest example of how Japanese beverage companies are seeking to quench their thirst for overseas growth as the population in their home market shrinks."
Reuters quoted Bernstein Research analyst Trevor Stirling as saying, "All Japanese beverage companies have been focused on getting growth outside Japan."
Suntory already distributes Beam products in Japan, and Beam distributes Suntory’s products in Singapore and other Asian markets. Suntory already has a portfolio of Japanese whiskies and one Scotch that are strong in its home market, but the acquisition of Beam gives it bourbon, Scotch, Irish and Canadian whiskies and access to a stronger distribution network not just in the U.S. but in key emerging markets such as India, Russia and Brazil, according to Reuters.
