Updated, 7:21 a.m. | Suntory, a privately held giant known for producing Japan’s first whiskey, has agreed to acquire the maker of Jim Beam and Maker`s Mark bourbons and Teacher’s and Laphroaig Scotch whiskies, for $13.6 billion.
Suntory, based in Osaka, is offering Beam shareholders $83.50 a share in cash, 25 percent above Beam’s closing stock price on Friday. It represents a multiple of more than 20 times Beam’s earnings before interest, taxes, depreciation and amortization for the 12 months ended Sept. 30.
Including the assumption of debt, the deal is valued at $16 billion.
The transaction is the first major takeover of 2014, as deal makers expect corporate chiefs to expand their businesses by buying other companies.
The deal is the biggest ever struck by Suntory, whose beverage empire includes Yamazaki Japanese whisky, Bowmore Scotch and Midori liqueur. The company’s previous largest transaction was its purchase of Orangina Schweppes from a consortium of investors for more than $3 billion in 2009.
Now it is adding Beam, one of the United States’ most recognizable purveyors of bourbon and other spirits. The company was once known as Fortune Brands, a conglomerate that included disparate businesses like home and hardware products and golf balls. In late 2010, it announced that it would pursue a three-way split, becoming a liquor company.
Besides its namesake bourbon, the company also sells Canadian Club whisky and Courvoisier cognac.
Under the deal announced on Monday, the current chief executive of Beam, Matthew J. Shattock, and his management team would continue to lead the business.
Suntory’s chairman, Nobutada Saji, said in a statement: “I believe this combination will create a spirits business with a product portfolio unmatched throughout the world and allow us to achieve further global growth.â€
Suntory says it intends to pay for the transaction with cash at hand and financing provided by the Bank of Tokyo-Mitsubishi UFJ. It is unclear how much the company will need to borrow, but it may be a substantial amount: The conglomerate reported holding just $2.2 billion in cash as of Dec. 31, 2012.
The deal is expected to close by June 30, pending approval by Beam’s shareholders.
Mitsubishi UFJ Morgan Stanley and the law firm Cleary Gottlieb Steen & Hamilton are advising Suntory. Centerview Partners and Credit Suisse are serving as financial advisers to Beam, and Sidley Austin is serving as legal adviser.
