Like most surprises, it turns out the Suntory bid for US bourbon giant Beam to create a global heavyweight was not that much of a shock after all.
Suntory may only be known outside its home markets for Bill Murray's (above) "make it Suntory Time" advert in Sofia Coppola's Lost in Translation, but the two companies are well known to each other, with Suntory distributing Beam's products in Japan, while the US group does the reverse in other Asian countries.
And, from reports in the New York Times and elsewhere, it appears that Suntory had first thought of bidding for Beam in the second half of 2011. In the end, the Japanese firm did not make its move until late last year.
A declining home market has been a driver for Suntory in pursuing a rapid and aggressive overseas expansion. And, in this case, while the lack of overlap in their product lines means little in the way of synergies from the deal, it makes competition issue less likely to emerge.
But Suntory is paying a rich price to secure the prize – offering Beam shareholders a 25 per cent premium to the company’s closing stock price last week, valuing Beam at more than 20 times earnings before interest, taxes, depreciation and amortisation.
Ratings agencies were quick to douse the celebrations, with both Moody’s and Japan’s Rating and Investment Information putting Suntory on review for a downgrade – Moody’s saying the acquisition will significantly increase debt at the 115-year old family held firm.
What it means for Beam's recently acquired Cooley Distillery is not so certain.
In welcoming the move, Cooley's former owner John Teeling disclosed that the Japanese company had run the rule over Cooley itself before the Beam acquisition.
Beam’s reasoning for buying Cooley was the recent surge in demand for Irish whiskey, particularly in the US. Teeling sees the Suntory deal as the key that will enable Irish whiskey to crack the notoriously difficult Japanese market – with Cooley at the front of the queue no doubt.