Japanese firm Suntory said Monday it would buy US beverage group Beam, the company behind the famous Jim Beam bourbon.

Suntory indicated it would pay $16 billion (11.7 billion euros) in a transaction that also entailed taking over the US firm's debt.

The two companies stated the merger would result in the creation of the world's third-largest producer in the spirit sector.

"Together, we'll be a global leader in distilled spirits, with the number-three position in premium spirits and a dynamic portfolio across key categories," Beam President and CEO Matt Shattock said in welcoming the transaction.

Market reaction

"This combination will create a spirits business with a product portfolio unmatched throughout the world," Suntory Chairman Nobutada Saji added.

Suntory said the current Beam management team would continue to head the business. Both companies had already cooperated closely before the announcement of the merger. The Japanese firm distributed Beam products in Japan, while Beam sold Suntory items in Singapore and elsewhere in Asia.

Investors hailed the planned takeover, with Beam shares surging by 25 percent in premarket trading on Monday.

hg/kms (AFP, Reuters)