Suntory Holdings' high-multiple acquisition of Beam Inc boosts the Japanese group's U.S. market share, but the U.S. bourbon maker's sales and distribution networks in Asia and other emerging markets may yet be the deal's trump card. "We will go after (emerging markets) together," Shingo Torii, Suntory's senior executive vice president, told reporters at a media event in Osaka earlier this week."Creating new value for whisky was the aim (of the Beam acquisition). Of course people care about the financial side and how valuable it will be, but the value will come in 10 years. We have a clear goal," he said, adding Suntory expected increased cashflow over the next decade to ease the burden of borrowing as much as $14 billion to fund the acquisition.Without obvious cost-saving synergies, the total $16 billion purchase price - at more than 20 times Beam's earnings before interest, tax, depreciation and amortisation - is among the most expensive in the industry. Some analysts say Suntory is paying too much just to access Beam's U.S. sales.But, as Japan's thirst for spirits dries up in an ageing population and as younger generations are more health-conscious, Suntory's rationale is likely the explosive growth elsewhere in Asia Pacific - a region that is forecast to account for 61 percent of the global spirits market by 2017, up from 55 percent.
Beam Inc. (Beam) is a premium spirits company that makes and sells branded distilled spirits products in markets worldwide. Shares of BEAM traded higher by 0.14% or $0.12/share to $83.52. In the past year, the shares have traded as low as $59.66 and as high as $83.61. On average, 1466990 shares of BEAM exchange hands on a given day and today's volume is recorded at 5379868.
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