Suntory Time for Beam?

[MyOldKyDram]

I think most of the xenophobia is coming from whiskey shooters and the former Bud crowd.

[HighHorse]

Well. Being an avid follower of brother Cowdery and others on this board, this has given me the opportunity to look up "xenophobia". So there ... I've now used it in a sentence!

[dementedavenger]

Exactly what this new combination will mean is all speculation at this point. We're still a few months away from the deal even being consummated. I'm still a little hazy on what part of Suntory is public. If Beam is now going to be private, there may be less transparency than there has been, which is unfortunate. It has always been much easier to get certain kinds of information out of Beam, as compared to Heaven Hill and Sazerac, which are private. Sales figures in particular. Brown-Forman is actually a little of both, in that it is technically public, but the Brown family still owns enough stock of the right class to maintain effective control. Perhaps that's how Suntory will evolve.

Beam Inc. is being acquired by Suntory Holdings, a privately-held company. Suntory Holdings releases limited financial detail for the benefit of bondholders. You can read their 2014 strategy outline for the Suntory Group Alcoholic Beverages Business Strategy (http://www.suntory.com/news/2014/11941.html) to get an idea of what kind of granular detail they release.

Suntory Beverage & Food is separate company that is publicly-owned. Its shares are traded on the Tokyo Stock Exchange and the business is comprised of non-alcoholic beverage assets. This company was spun-off from Suntory Holdings in 2013.

[dementedavenger]

O Demented one, I've had literally hundreds of Japanese students and also been to Japan three times and the relationship of that country with America is unlike that of any other country. I threw that example out there to illustrate the extremity that SOME people in Japan go to in pursuit of some things American, but sure there a lot of old Japanese people who loathe America, haven't forgotten the war, and want to remilitarize. There are those young people who love their own culture and seek to preserve traditions as well. Hell, there are those who love romantic European cities like Paris and France, or moorish castles in the South of Spain, who collect wines and spirits from around the world, who are still xenophobic when it comes to the actual people of those countries. But they love American whiskey, just like they love Scotch and Irish (see Nikka Coffey Grain, made in stills shipped from Ireland). They wouldn't have paid the premium if it were only for the Canadian or Scottish side of Beam's businesses. It has to do with how they love the hottest whiskey in the world, bourbon, and the Beam name which carries weight worldwide as an American brand. My statements are sound, and not meant to insult anyone or to make a gross generalization about Japanese people. Chill man.

Earlier, you wrote: "The article was meant to illustrate the unusual heights that the Japanese will go to when it comes to all things American. Like paying 25% over list for a spirits company."

That statement implies that you believe there was a cultural reason why Suntory paid a 25% premium. That's what I was responding to.

[sutton]

Suntory Holdings is probably sitting on a ton of cash that they need to put to work. Look at the explosion of brands they already hold, they had to be raking it in. Now, what to do with all of that cash? The Nikkei has been going sideways for years, I believe the Japanese bond market has been on the verge of collapse at times, foreign equities and bonds are not in much better shape, so you really only have two choices left - pay out the cash to the owners or go M&A shopping.

The premium they paid is not outrageous considering the market dynamics and as squire and others have pointed out, gives them in one transaction additional distilleries and products in every major whiskey producing country - will be interesting to see if/how Diageo reacts.

[tanstaafl2]

Suntory Holdings is probably sitting on a ton of cash that they need to put to work. Look at the explosion of brands they already hold, they had to be raking it in. Now, what to do with all of that cash? The Nikkei has been going sideways for years, I believe the Japanese bond market has been on the verge of collapse at times, foreign equities and bonds are not in much better shape, so you really only have two choices left - pay out the cash to the owners or go M&A shopping.

The premium they paid is not outrageous considering the market dynamics and as squire and others have pointed out, gives them in one transaction additional distilleries and products in every major whiskey producing country - will be interesting to see if/how Diageo reacts.

Seems more like Suntory (and others considering acquisitions) may be reacting more to Diageo and particularly its efforts to acquire United Spirits. Diageo is after all the Goliath and if you want to compete these days it appears you need to keep pace.

[p_elliott]

Suntory is only sitting on $2Billion in cash they are going to have to borrow this money. I have a coworker that was just raising hell about this sell being " Chinese" I bet he never drank a drop of Jim Beam.

[squire]

I would love to be sitting only on any amount of cash large enough to be called a pile.

[sutton]

I think that is the public company, right, not Suntory Holdings?

[393foureyedfox]

as most on here know, when the Japanese decide to do something, they will do it, and usually do it very well. It's part of their culture that was heavily influenced by NOT wanting to be a colonial subject of the west in the 1800's. just look at the mindset that the guy in this story represents:

http://news.yahoo.com/japan-wwii-soldier-hid-jungle-until-1974-dies-091014526.html

[sutton]

as most on here know, when the Japanese decide to do something, they will do it, and usually do it very well. It's part of their culture that was heavily influenced by NOT wanting to be a colonial subject of the west in the 1800's. just look at the mindset that the guy in this story represents:

http://news.yahoo.com/japan-wwii-soldier-hid-jungle-until-1974-dies-091014526.html

I'm old enough to remember when "Made in Japan" was considered derogatory ... and how quickly that changed in the 80's when everyone was worried that "Japan Inc." was buying America. And how that changed when they hit their own financial bubble in the 1990s created their own economic/banking crisis and going into protracted economic stagnation.

I do think their corporate business culture leads them to think longer term than ours - and that bodes well for whiskey which takes above all things ... time.

[oke&coke]

And today, Made in OCCUPIED Japan is highly collectible. I have a window fixture that has that stamp.

[Dannabis]

I find it very odd that most of America's national spirits are produced by Japanese companies..

Looking in to Suntory group, they seem to be a huge conglomerate. Apparently hugely successful.

I guess I do take pride (for now) in Heaven Hill being American owned.

[portwood]

Looking in to Suntory group, they seem to be a huge conglomerate. Apparently hugely successful.

Not sure what you're implying.

Perhaps you mean like General Electric, and hundreds of other American conglomerates that control large chunks of foreign economies?

Get over it, it's a global economy: foreigners own some American assets, Americans own foreign assets. As long as companies follow the rules and add value its all good.

[deathevocation]

In Australia, I don't think any of our big brewers (save for Coopers) or distillers (really just Bundaberg rum) are owned by Australian companies anymore. That's the world these days. FWIW I've been to Japan around six times, beautiful country, particularly the women

[deathevocation]

Hopefully the Japanese ensure we get 90 proof Makers rather than the 80 proof product we get now.

[TunnelTiger]

Or maybe even some BP Makers? Wow, would I love to try that.