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Beam To Acquire Cooley For $95 Million, Boosting Competition In Irish Whiskey Category

December 16, 2011

For the past year, speculation has swirled about Beam Inc. being a takeover target, but earlier today, the company made a major move of its own by agreeing to acquire Ireland’s Cooley Distillery. The $95 million purchase will make Beam a player in the world’s hottest premium spirits category.

Cooley, the only remaining major independent Irish whiskey distillery, owns and produces the Kilbeggan, Connemara, Tyrconnell and Greenore brands. The company currently sells around 250,000 cases annually, divided among its brands, private label products and bulk sales to third-party customers. Additionally, Cooley has production capacity to support substantial future growth, a key asset in the fast-growing category. In the U.S., by far Irish whiskey’s biggest market, the category advanced by 20.8% to nearly 1.4 million cases in 2010, according to Impact Databank, and its rapid expansion has continued in 2011. For the first 10 months of the year, Irish whiskey sales in control states grew by 19.7%, and for the 52-week period ending November 27, the category rose by 23.7% in SymphonyIRI channels.

Led by its high-flying Jameson brand, Pernod Ricard dominates the Irish whiskey category both in the U.S. and globally, while Diageo is the number-two player on the strength of its Bushmills brand. Beam’s entry into Irish whiskey heats up competition in a category that, even after years of impressive growth, still has plenty of upside.

In the months preceding Beam’s transformation into a standalone spirits play—and consistently since it began trading publicly in early October—there’s been plenty of speculation that Beam’s days as an independent company may not be long. But Beam CEO Matt Shattock has maintained his position that Beam not only plans to remain independent, but that it would focus on expansion. Today’s Cooley deal is a big step in that direction.

 

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