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Japanese company buys spirits maker Beam for $13.6B

7:18 PM, Jan 14, 2014   |    comments
Japanese drink giant Suntory's whisky Yamazaki (R), Hibiki (L) and US beverage giant Beam's bourbon whisky Jim Beam (2nd L), Maker's Mark (2nd R) are displayed at Suntory's office in Tokyo on January 14, 2014. Suntory Holdings' proposed 16 billion USD buyout of the firm behind Jim Beam bourbon would mark its biggest foreign trophy yet, but analysts warn it will burden the Japanese drinks giant with heavy debt -- and may stoke a bidding war. AFP PHOTO / Yoshikazu TSUNO (Photo credit should read Y
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It's hard to name an American brand that's had Bette Davis, Sean Connery -- and Leonardo DiCaprio -- all tooting their celebrity horns for it.

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That brand, Jim Beam, is on the brink of no longer being American-owned. Japanese whiskey and beer giant Suntory Holdings has agreed to purchase Beam., maker of the legendary Jim Beam bourbon, for a cool $13.6 billion. In addition, the transaction includes assumption of Beam's outstanding net debt of about $2 billion.

It's early, but the deal is sure to rank among the biggest of 2014. So eager was Suntory to get its hands on Beam that the maker of Jim Beam and Canadian Club liquor walks off with a $83.50 cash per share -- which is about 25% above Beam's closing price on Friday. Competing bids could be on tap, too. The combined company is expected to have annual liquor sales of more than $4.3 billion.

The deal comes in an era when iconic American companies, brands and even real estate continue to be gobbled-up by foreign investors. Anheuser-Busch InBev is now Belgian-owned. Seven & I Holdings of Japan owns the sprawling 7-Eleven convenience store chain. And even New York's iconic Chrysler Building is owned by the Abu Dhabi Investment Council.

But Suntory - which makes Yamazaki whiskey and Premium Malt's beer - totally gets American shtick. It was, after all, among the earliest major Asian marketers to cozy-up to American celebrities to sell stuff in Japan. Way back in the "Rat Pack" heyday of the early 1970s, no less than Sammy Davis Jr., showed up in ads for Suntory brands in Japan.

Even folks who don't have the name Suntory at the tips of their tongues, probably are familiar with actor Bill Murray, whose character in the 2003 film Lost in Translation, so perfectly depicted the image of a fading American actor seeking redemption - and a few bucks - overseas. His most famous line from the film: "For relaxing times, make it Suntory time."

Clearly, with this move, it is Suntory's time. The company, founded in 1899, has expanded aggressively overseas in recent years.

But even if Suntory has master plans to make Beam more of a global brand, the key is to not let the brand stray one iota from its American roots. The bourbon, produced in Kentucky, has been linked to some seven generations of the Beam family for more than two centuries.

Jim Beam must remain the "quintessential American brand," says David Srere, co-CEO and chief strategy officer at the branding firm Siegel+Gale. "The best thing they could do is stay the hell away from changing that."

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