Updated from 8:11 a.m to include opening share prices, analyst commentary and Pershing stake.
NEW YORK (TheStreet) -- Japanese whiskey maker Suntory Holdings is buying Beam
(BEAM), in a $16 billion deal that will create an international alcohols conglomerate to take on the likes of Diageo
(DEO) and and Pernod Ricard. The deal also will be a windfall for Pershing Square's Bill Ackman, who has been a long-time Beam investor and advocated the company's spin-off of Fortune Brands Home & Security
(FBHS), a set of non-alcohol businesses owned by the company.
Deerfield, Ill.-based Beam said on Monday that Suntory will buy the company for $83.50 a share in cash, or approximately $16 billion, in a takeover that represents a 25% premium to Beam's closing stock price of $66.97 on January 10. The deal will create an international alcohols conglomerate with net sales of $4.3 billion, were the deal to close.
Beam's portfolio of alcohols incdudes 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. Suntory is the maker of Japanese whiskies Yamazaki, Hakushu, Hibiki, and Kakubin, Bowmore Scotch whisky and Midori liqueur. As part of Monday's transaction, Beam's President and Chief Executive Officer Matt Shattock and the current Beam management team will continue to lead the business and headquarters will remain in Deerfield, Ill.
"Our combined global routes to market will expand our joint distribution footprint, and the powerful innovation capabilities both companies have developed will be a significant advantage," Beam CEO Matthew J. Shattock said in a statement. Beam will allow Suntory to achieve growth in markets worldwide, including the United States, the company said.
Beam shares were rising 24% to $83.06 in early Monday trading, just below Suntory's offer price.
It is those share price gains where Ackman and Pershing Square played a crucial role.
Ackman advocated for Beam's previous corporate incarnation, Fortune Brands, to stream-line its businesses by way of a series of spinoffs and asset sales. As a conglomerate, Beam's businesses included its popular alcohols brands, Acushnet gold brands and a set of home fixture and home security brands including Moen faucets and Master Lock.
In 2011, Fortune Brands sold its Acushnet golf businesses, which include Titleist and FootJoy, in a $1.225 billion deal. At the time of that transaction, Fortune Brands also agreed to spin off its home security and fixtures businesses in a deal that payed shareholders a $500 million special dividend and gave them a stock holding in Fortune Brands Home & Security when it began trading in the fall of 2011.
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