What Does AT&T’s Soured T-Mobile Merger Mean for Two Bourbon Companies?

AT&T’s (NYSE:T) travails over getting regulatory clearance for its $39 billion purchase of T-Mobile (PINK:DTEGY) USA should send up red flags for Diageo (NYSE:DEO) who is reportedly looking to snap up Beam, manufacturer of the Jim Beam (BEAM) and Maker’s Mark bourbon whiskies.

Regulatory authorities are now leery of large, market-dominant mergers that could result in job cuts in a difficult economic environment. “The deal environment has changed with the (AT&T) mobile merger plan, and Diageo could well face an uphill task to convince U.S. regulators of the merits of a Beam takeover,” according to an investment banker in the know.

Diageo’s deal size could push $10 billion and give it a share of more than 30% of the U.S. spirits market. Diageo does not have big brands in its U.S. whiskey portfolio and could be attracted by the brand equity of Beam’s Jim Beam, top-selling bourbon in the U.S., and Maker’s Mark, which is among the six top-selling whiskies. Diageo has the clout on its balance sheet to make the purchase.

Here’s how these stocks closed the week:

Diageo plc (NYSE:DEO): DEO shares recently traded at $83.90, down $0.61, or 0.72%. They have traded in a 52-week range of $71.25 to $86.78. Volume today was 651,848 shares versus a 3-month average volume of 608,312 shares. The company’s trailing P/E is 17.84, while trailing earnings are $4.70 per share. Get the most recent company news and stock data here >>

AT&T, Inc. (NYSE:T): T shares recently traded at $28.85, up $0.06, or 0.21%. They have traded in a 52-week range of $27.20 to $31.94. Volume today was 39,068,628 shares versus a 3-month average volume of 28,698,300 shares. The company’s trailing P/E is 14.64, while trailing earnings are $1.97 per share. Get the most recent company news and stock data here >>