Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=226558
Story Retrieval Date: 8/29/2014 3:18:18 PM CST
Beam Inc., producer of popular Jim Beam whiskey, has recently agreed to be acquired by Japanese liquor giant Suntory Holdings Ltd.
Deerfield hopes to maintain Beam Inc. headquarters
Japanese liquor giant Suntory Holdings Ltd. has agreed to pay $13.6 billion for Beam Inc., the Deerfield-based maker of Jim Beam and Makers Mark whiskey. That is a windfall for Beam shareholders who saw the company’s shares surge 25 percent after the deal was announced Monday.
But it could be bad news for Deerfield if Suntory decides to consolidate headquarters to its New York office where its U.S. business is located.
Beam’s headquarters employ 400 people in Deerfield, many of them highly paid executives.
“You can’t lose 400 jobs and not see an impact,” said Joseph Bower, professor of business administration at Harvard University.
Suntory said Monday it has no plans to move Beam’s headquarters. But acquiring companies often say that and later reverse course.
“You leave it alone for a while because you bought it for a reason. But over time operating jobs will stay and usually corporate will move,” Bower said.
Twenty-seven miles north of Chicago, the village of Deerfield boasts a median household income of more than $107,000, one of the highest in the Chicago area. Deerfield is also home to three Fortune 500 companies: Walgreen Co., Mondelez International Inc. and Baxter International Inc.
Even with that cushion, Deerfield Mayor Harriet Rosenthal expressed concern about the possibility of Beam Inc. relocating.
“Every time you lose a business it’s always a loss,” Rosenthal said. “We don’t like to lose jobs and we don’t like to lose people.”
Chris Johnson, spokesman for the Chicagoland Chamber of Commerce, said he does not expect Suntory to change its mind about relocating Beam’s headquarters in the short term.
Suntory agreed to pay $13.6 billion for the distilled spirits manufacturing company in order to become the world’s No. 3 premium spirits producer. If Beam shareholders and the Federal Trade Commission approve the deal, Beam stockholders will receive $83.50 per share. The deal is scheduled to close by the end of June.
Suntory said that Beam Inc. CEO Matthew Shattock will continue to lead the Beam unit. According to Crain’s Chicago Business, Shattock could reap $38.7 million if the acquisition closes as expected. That number includes his stock options, restricted stock options, performance plan shares and other stock holdings.
If Beam were to back out of the deal now, it would be obligated to pay a $425 million termination fee to Suntory, according to Beam’s most recent 8K filing with the Securities and Exchange Commission.
Beam Inc. shares closed at $83.40, up 22 cents, or less than 1 percent.