European regulator approves Suntory's $13.6-bn Beam deal
22 Apr 2014
The European antitrust regulator has approved Suntory Holdings' $13.6-billion acquisition of Beam Inc, a deal which would make the Japanese company the world's third-largest spirits maker.
''After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it,'' the European Commission said in a release.
''The transactions mainly impact the production and commercialisation of Bordeaux wines in France where Suntory, Castel, GMdF and MAAF subsidiaries are all present. However, as the increment arising from this transaction is rather insignificant, the Commission concluded that the transaction would not raise competition concerns,'' the release added.
In January, Suntory, one of Japan's largest beverage companies, struck a deal to buy Illinois-based Beam Inc for $13.6 billion in cash, including debt. (See: Japan's Suntory acquires US spirits maker Beam in $16-bn deal)
The deal brings together Beam's Jim Beam and Maker's Mark bourbons and Courvoisier cognac with Suntory's Hibiki and Kakubin Japanese whiskies and Midori liqueur.
The combined portfolio 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, and Suntory's leading Japanese whiskies Yamazaki, Hakushu, Hibiki, and Kakubin, Bowmore Scotch whisky and Midori liqueur.
Suntory, which generates more than 90 per cent of its annual sales of around $11.2 billion in Japan, had said that the Beam deal will boost its share of the US market from 1 per cent to 11 per cent and group annual turnover to $13.7 billion.
In recent years, Suntory has been making acquisitions and developing business partnerships with major beverage companies in a bid to rapidly expand its global footprint
In 2009, Sundory acquired European drink maker Orangina Schweppes from its private equity owners for €2.6 billion, and later bought New Zealand's second-largest beverage maker Funcor Group.
In 2010, the company entered into a partnership agreement with global beverage giant PepsiCo Inc's China unit, expanding distribution of its products in the country.
In 2011, Suntory formed a joint venture with Indonesian's beverage and food group Garudafood, and formed a strategic alliance in 2012 with PepsiCo in Vietnam by acquiring a 51-per cent stake in its beverage business, which will serve as a bottler for both companies in Vietnam.
In 2013, it acquired Lucozade and Ribena brands from GlaxoSmithKline for $2.11 billion in order to expand its soft drinks portfolio in Europe.
