Suntory in $6bn boost to talk of Beam deal

By PETER RANSCOMBE
Published on 13/12/2012 00:00

SPECULATION over a joint bid for Teacher’s Scotch whisky maker Beam intensified yesterday after sources revealed that Japanese conglomerate Suntory is planning to raise $6 billion (£3.7bn) by floating its food and soft drinks division.

Suntory – which bought whisky distiller Morrison Bowmore in 1994 – is expected to keep a sizeable stake in its food and drink business following the flotation in Tokyo, the sources said, and is likely to use the cash raised for foreign acquisitions.

News of the proposed initial public offering (IPO) comes just days after it emerged that privately-held Suntory – which bottles Pepsi in Japan and bought Orangina Schweppes in 2009 – had held talks earlier this year with Diageo, Scotland’s biggest whisky distiller, over a possible joint bid for New York-listed Beam.

On Tuesday, Diageo – which makes whiskies including Bell’s and Johnnie Walker – revealed takeover talks with tequila maker Jose Cuervo had ended, stoking further talk of a bid for Beam. Diageo already plans to buy a controlling stake in India-based Whyte & Mackay whisky owner United Spirits.

City analysts have long seen Beam – which also owns the Ardmore and Laphroaig whisky brands – as a potential take-over target. Beam de-merged from Fortune Brands in October 2011.

Morrison Bowmore – which also owns the Auchentoshan, Glen Garioch and McClelland’s malt labels – would not be included in the IPO because it is part of Suntory’s liquors division, which also includes Japanese whisky Yamazaki.

Asked about the possible IPO, a Suntory spokeswoman said nothing had been decided by the Osaka-based firm.

Suntory, which traces its roots to the late 19th century and a small Japanese wine production business, grew in the 1920s with the country’s first malt whisky distillery and began brewing beer in the 1960s.