Home » alcohol sin stocks » Suntory To Buy Jim Beam (BEAM)

I confess: If Alex Trebeck told me: “Things to drink from Japan”, I wouldn’t immediately say, “What is whiskey?”

In fact, whiskey is pretty new to Japan. Japan’s first whiskey distillery wasn’t built until 1923. (Compare that to whiskey distilling in the US, which has been around since before the US was self-governing).

The dude who built Japan’s first whiskey distillery was already producing wine for Japan and his company came to be called Suntory. Suntory is a large food and beverage company with international operations.

Never heard of them? They own a little company called Pepsi Bottling Ventures LLC, which handles the bottling and distribution of Pepsi in North America, plus they handle the franchising of Subway Sandwiches in Japan. They own a bunch of food and drink brands, as well as several restaurant chains. So yeah, not a tiny company. They also own wine, beer, and liquor brands in both Japan and China.

So this company is looking to drop $16 billion for Jim Beam (BEAM).

According to this Reuters article, it will make Suntory the third largest distillery in the world, which includes 11% of the the US market.

The merger hasn’t happened yet. It isn’t expected to happen until April. But it just received permission from whoever is in charge of antitrust rulings in the US. Similar antitrust rulings are expected from the European Union.

That means: Possible stock price movement in April. Which direction will it go? I suspect it will continue to improve for the time being. Whiskey is enjoying a surge in market affection, and the Suntory merger shouldn’t see much or any negative movement. And since whiskey takes so long to make anyway, Suntory should see some benefit from the deal (and, thus, stock holders should too) as long as they maintain the status quo. But I think the price could pop even more in the coming years. Suntory’s access to the Asian market, and their expertise at bottling and distributing, and their sheer size, will likely add a positive influence to the story. Sure, they won’t be able to suddenly make more whiskey to meet the growing demand, but they should be able to play to their strengths to create the most efficient distilling and distribution system possible.


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