I really hope DEO does NOT buy this company. I don't want to see them get wrapped into someone else when there is exceptional growth potential. Huge growth in their brands being compounded upon.
Mid-Cap company with good growth will return much more to shareholders in stock price appreciation versus a quick buyout payout and then having to pay top-dollar for DEO in order to maintain exposure to BEAM, which will be tucked away and have its cash flow siphoned off to support THEIR premium brands.
Don't get me wrong- I love DEO and am waiting for a significant pullback, if it ever comes, to acquire the stock, but I do not like what would happen to BEAM due to and following a buyout.
On a hunch, and owner of shares in Campari, I think Diageo will take a crack at buying Campari and not Beam.
They want Tequila, and with this purchase, they get "Cabo Wabo" which is a good platform for growth with the right media mix in advert. Plus they get a strong foothold in Bourbon by getting the #2 brand "Wild Turkey"
From what I've been reading in the WSJ, Diageo is DONE trying to work a deal to buy Tequila Cuervo, and don't want Sauza from Beam...and further, what kind of problems could arise from a cultural perspective? French-Deep American South relations? it's a certain trainwreck! For that matter, Diageo's Bulleit bourbon is made by Kirin (of Japan)
They can get a good Tequila brand with CW, and market the heck out of it while taking market from Cuervo and Beam in one fell swoop.
my two cents.
Diageo (DGEAF.PK) has abandoned discussions through which it would have bought Cuervo tequila and will now look to end its 26-year-old arrangement to distribute the brand, igniting speculation that it may search out a substitute. Diageo’s deal to distribute the tequila outside of Mexico is due to expire at the end of June. Analyst Anthony Bucalo at Groupo Santander thinks that Diageo might now aim at Beam (NYSE:BEAM), which owns the tequila brand Sauza.