Family-owned Bacardi Limited is to acquire 100% of Patrón Spirits International AG and its ultra-premium Patrón tequila brand. The deal represents an enterprise value of US$5.1 billion for Patrón and is expected to close in the first half of this year.
The transaction, which is subject to customary closing conditions, follows the relationship the companies have had for nearly a decade since Bacardi’s initial acquisition of a significant minority stake in Patrón in 2008.
According to the most recent IWSR data, the transaction will make Bacardi the number one spirits player in the super-premium segment in the USA and the second largest spirits company in market share by value in the same market.
In travel retail, Patrón’s tequilas posted +14.9% growth in sales year-on-year in 2017.
The Patrón leadership team, including Chief Executive Officer Edward Brown, Chief Operating Officer David Wilson and Chief Marketing Officer Lee Applbaum will continue in their roles.
In a statement, Bacardi said: “Tequila is one of the fastest-growing and most attractive categories in the spirits industry, with Patrón being the clear market leader in the super-premium segment. Super-premium brands continue to experience the fastest growth, and the trend is expected to continue.”
“We started this business more than a quarter century ago with a singular mission – to create an ultra-premium, luxury tequila,” said Patrón Co-Founder John Paul DeJoria. “Today, with that continued commitment to quality and several other extraordinary brands in our portfolio, we produce more than three million cases of distilled spirits annually that are enjoyed around the world. I am proud of what our entire organisation has accomplished, and the work we do in giving back to the people and communities in which we operate.”
“Patrón and Bacardi were both founded on the principles of quality, integrity, and innovation, and driven by a sense of fearlessness – it’s in our DNA,” said Bacardi Limited Chairman Facundo L. Bacardi. “It has been a privilege being a partner for a number of years with a remarkable entrepreneur like John Paul DeJoria. John Paul’s vision, integrity, and courage are responsible for introducing the world to simply perfect tequila. As we move forward together, we will continue to pursue perfection as the guiding light in everything Patrón stands for.”
Barry Kabalkin, Vice Chairman of Bacardi Limited and a member of the board of directors of Patrón since 2008, added: “Patrón is one of the world’s most coveted spirits brands, and we are thrilled to take our long-standing relationship to the next level. Working with the extraordinary team at Patrón, for whom we have the highest possible respect, we will stay true to our shared values. That’s a promise I made to John Paul, a one-of-a-kind visionary, and to Ed Brown, who over a period of nearly 20 years has successfully turned Patrón into an industry phenomenon. Patrón is a brand that transcends the tequila category and will uniquely complement the Bacardi portfolio of premium brands.”
“Adding Patrón to the Bacardi portfolio creates a tremendous opportunity for the brand outside of the United States as Bacardi’s international distribution network will help grow Patrón around the world, increasing scale in the US and globally,” said Mahesh Madhavan, CEO of Bacardi Limited. “I look forward to working with the talented team at Patrón.”
“Patrón is more than just a brand we have built; it has been a personal passion for nearly 20 years. I truly consider the Patrón team my extended family,” said Patrón President and CEO Edward Brown. “As Bacardi has had an ownership stake in Patrón for almost a decade now, and knows and appreciates our unique business, they are the best and most logical steward to continue our pursuit of perfection.”
Following the closing of the deal, DeJoria will serve as an ambassador for Patrón in the role of Chairman Emeritus. He said he intends to work with Bacardi in advancing philanthropic projects and environmental consciousness. Patrón’s efforts have included support for food banks, education, and disaster relief, as well as development of an eco-friendly reverse osmosis irrigation system using recycled agave.
Bacardi Global Travel Retail Managing Director Mike Birch said: “While it’s too early to give any details on bringing Patrón into our portfolio in travel retail, the team is very excited. It’s a fantastic brand in a strong category, with particular appeal in the Americas.”
