Beam Inc has been tagged as a takeover target since it came into being

Beam Inc has been tagged as a takeover target since it came into being

A report in a UK newspaper today (9 December) has claimed that Diageo and Suntory held talks earlier this year with a view to making a move for Beam Inc.

The Sunday Telegraph cited unnamed sources as saying the two companies were in discussions in the Spring and Summer about acquiring Beam. The US-based spirits company, which was formed when Fortune Brands offloaded its golf and home & security divisions last year, has been seen as a takeover target since it came into being in October, 2011.

While no quotes appeared in the news story, the Telegraph said that Diageo had also made contact with private equity companies about teaming up for Beam. A spokesperson for Diageo declined to comment when contacted by the paper.

Diageo, which is keen to gain traction in the Bourbon category, would need a partner to overcome anti-trust issues were it to take over Beam. Suntory, meanwhile, has manoeuvred to reduce its exposure in Japan, where its beer business has struggled in a stagnant market. Three years ago, it bought Paris-based soft drinks producer Orangina Schweppes for around US$3.8bn.

In September, Suntory consolidated its distribution partnership with Beam in Japan, by saying it will be replacing Ashai as distributor of Jim Beam and Maker's Mark in the company from the beginning of next year. The Japanese firm will be Beam's sole distributor in the company.

Since becoming a pure-play spirits company, Beam has made a number of acquisitions, most notably Irish whiskey producer Cooley Distillery a year ago and the Pinnacle vodka and Calico Jack rum brands in April.

Although Diageo remains in talks with the owners of Jose Cuervo to take a stake in the Tequila brand, a move for Beam, which owns Sauza Tequila, would signal an end to the tie-up. The existing sales, marketing and distribution deal expires in June.