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East meets west as Suntory buys Beam

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East meets west as Suntory buys Beam
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Japanese distiller Suntory is buying the US spirits company that makes Jim Beam and Maker’s Mark bourbons, as well as Courvoisier cognac and Sauza tequila.

It is the latest Japanese beverage firm seeking overseas growth as the population in its home market shrinks.

The cash deal – worth $13.6 billion (9.94 billlion euros) – makes Suntory boss Nobuhiro Torii head of the world’s third-largest spirits producer in what is reported to be Japan’s third-largest announced outbound takeover deal of all time.

This gives the Japanese firm access to a stronger distribution network in the US and key emerging markets including India, Russia and Brazil.

No half measures

Suntory makes Yamazaki, Hakushu, Hibiki and Kakubin Japanese whiskies, Bowmore Scotch whisky and Midori liqueur.

Once the acquisition is completed, Suntory will become the third largest whiskey company and the fifth largest malt whiskey company by volume, according to International Wine & Spirit Research.

The combined company will have annual sales of about $4.3 billion (3.14 billion euros).

Beam has been viewed as an attractive takeover target since becoming a stand-alone public spirits company in October 2011.

Cheering growth

So-called brown spirits, like whiskey, have experienced a resurgence in recent years, helped by the growing popularity of classic cocktails.

US sales volume of bourbon and Tennessee whiskey have grown 13.2 percent in the five years to 2012, according to the Distilled Spirits Council of the United States.

Super-premium brands have grown nearly 80 percent over the same period.