Suntory has entered into an agreement with drinks giant Beam to purchase all its outstanding shares for $83.50 per share or for total value of approximately $16bn.

The transaction will allow Suntory to become a strong player in premium spirits market, whose annual net sales exceed $4.3bn.

The combined portfolio will include Beam’s brands such as Jim Beam, Maker’s Mark and Knob Creek bourbons, Teacher’s and Laphroaig Scotch whiskies, Canadian Club whisky, Courvoisier cognac, Sauza tequila, and Pinnacle vodka, and Suntory’s brands such as Yamazaki, Hakushu, Hibiki, and Kakubin, Bowmore Scotch whisky and Midori liqueur.

Suntory board president and chairman Nobutada Saji said the combination with Beam will create a spirits business with a product portfolio unmatched throughout the world and allow them to achieve further global growth.

"We are particularly excited about the prospect of working more closely with Beam’s excellent management and employees who will play an integral part in the growth of the business," Saji added.

Post acquisition, Beam president and CEO Matt Shattock and the management team will continue to manage the business from the company’s headquarters near Chicago, Illinois.

Shattock said together they will be a global leader in distilled spirits with the #3 position in premium spirits and a dynamic portfolio across key categories.

"With particular strength in Bourbon, Scotch, Canadian, Irish and Japanese whisky, the combined company will have unparalleled expertise and portfolio breadth in premium whisky, which is driving the fastest growth in Western spirits," Shattock added.

"Our combined global routes to market will expand our joint distribution footprint, and the powerful innovation capabilities both companies have developed will be a significant advantage."

The transaction, which is subject to Beam’s stockholders approval, regulatory approval and other customary closing conditions, is expected to close in the second quarter of 2014.