Is Suntory’s Bid for Beam, Inc. too High?

 

Suntory’s US$16 Billion bid for Beam, Inc. is a high price for a company with two fundamental problems, states Jeremy Cunnington, Senior Alcoholics Drinks Analyst at Euromonitor. Beam has strong brands such as Jim Beam Bourbon and Courvoisier Cognac but a large proportion of its brands are considered low value and do not offer much growth potential. Secondly, the company is too narrowly focused, with two thirds of Beam’s volumes concentrated in North America only. These problems, coupled with the high debt that Suntory will be taking on, may leave the company in a weakened state.

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