French spirits & wine group Pernod Ricard has emerged as the preferred candidate in a potential sale of US drinks company Brown-Forman Corporation, according to a Reuters report.
The development follows a New York Times report on 17 April that Kentucky-based Sazerac is preparing an all-cash-and-stock offer worth around US$15 billion to acquire Brown-Forman, valuing the company at the same amount.
While sellers typically favour all-cash transactions for their simplicity in valuation, the three sources told The Times that “investors would still have the option of stock if preferred”.
Citing a person familiar with the matter, Reuters noted that the family controlling Brown-Forman considers Pernod Ricard as a more prestigious buyer, largely due to its star-studded brand line-up.
Another Reuters source said the Pernod Ricard bid under consideration would comprise 80% stock and 20% cash, though the terms are still subject to change.
A potential Pernod Ricard deal could differ significantly from Sazerac’s traditional buyout offer, Reuters reported, with analysts pointing to a possible share swap that would enable the Brown family to maintain some control.
The latest developments in the acquisition come after Brown-Forman and Pernod Ricard confirmed on 26 March that they are in discussions over a potential sale, which Brown-Forman described as a “merger of equals”.
Brown-Forman Corporation owns Jack Daniel’s, Woodford Reserve, Old Forester, New Mix, el Jimador, Herradura, The Glendronach, Glenglassaugh, Benriach, Diplomático Rum, Gin Mare, Fords Gin, Chambord and Slane.
Pernod Ricard’s powerhouse portfolio features Ballantine’s, Chivas Regal, The Glenlivet, Martell, Absolut, Jameson, Beefeater, Royal Salute, Havana Club, Mumm Champagne, Pernod, Ricard and many more.
Sazerac owns and operates distilleries and homeplaces, including Hawk’s Rock Distillery in County Sligo, Ireland; Buffalo Trace Distillery in Kentucky, USA; Domaine Sazerac de Segonzac in Cognac, France; and Paul John Distillery in Goa, India. ✈
