Thursday, September 28, 2023
HomehalftimeGabelli bullish on bourbon after Beam deal

Gabelli bullish on bourbon after Beam deal

Bourbon represents a global growth area, with plenty of companies boasting positive cash flow, the chairman and CEO of Gabelli Funds said Monday.

"The concept is simple," Mario Gabelli said. "Beverages and booze are good cash flow, good pricing power and a good global market."

He made his comments on CNBC's "Halftime Report" following news that Japan's Suntory would buy Beam in a deal valued at $14 billion.

Beam's brands include Jim Beam, Maker's Mark and Canadian Club.

(Read more: Japan's Suntory to buy US drinks group Beam)

Gabelli credited hedge fund manager Bill Ackman of Pershing Square for his activism in pushing for Fortune Brands to spin off Beam.

"All the moon and the sun and the stars are coming together," he said. "The company was split up in part because of what Ackman did and stirring the pot there."

Asked whether he thought there might be a bidding war for Beam, Gabelli said there aren't many players.

(Read more: A bourbon lover's Holy Grail: The Kentucky Bourbon Trail)

"There's a limited number of buyers," he said. "Only two, Pernod and Diageo, have the global distribution and need to be in certain beverages, and there's some overlap," he said. "Suntory's a pretty easy buyer in terms of different product lines."

Gabelli pointed out two other companies among his holdings that could benefit from the demand for bourbon: Brown Forman, which produces Jack Daniels and Southern Comfort, and Campari, maker of Wild Turkey.


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