Pernod Ricard, Brown-Forman Confirm Merger Talks

Periods of pullback in an industry typically see consolidations, and alcohol is no different. As this business sector undergoes a time of economic transition, rumors broke yesterday that Pernod Ricard and Brown-Forman were talking about a potential merger.

Both have subsequently issued statements confirming that this news is true.

“Following recent speculation in the press, Pernod Ricard confirms that it is in discussions regarding a potential business combination with Brown-Forman,” the French-based global company said in a release. “If agreed and subject to customary approvals, this partnership would be akin to a merger of equals, drawing from the talent and expertise of both companies, and creating value for shareholders of both companies.”

“The contemplated combination would create a global spirits leader with enhanced scale, a powerful brand portfolio, and a balanced geographic footprint, all anchored by two iconic families,” the Pernod-Ricard release continued. “Operational synergies would be significant, leveraging Brown-Forman’s iconic brands, including Jack Daniel’s, and Pernod Ricard’s global distribution strength and exposure to highest growth potential markets.”

“There can be no assurance that any agreement will be reached. Pernod Ricard does not intend to further communicate until an agreement is reached or discussions are terminated.”

Brown-Forman put out a similar communication: “We note the recent market rumors regarding a potential business combination involving Brown-Forman and Pernod Ricard. Brown-Forman regularly explores and evaluates strategic opportunities, and can confirm it is engaged in discussions with Pernod Ricard.

If agreed and subject to customary approvals, this partnership would be akin to a merger of equals, drawing from the talent and expertise of both companies, and creating value for shareholders.

Synergies from the contemplated combination are expected to be significant, creating a global spirits leader with enhanced scale, a powerful brand portfolio, and a balanced geographic footprint, all anchored by two iconic families. No agreement has been reached as to the terms of any possible transaction, and there can be no assurance that any such agreement will be reached. Brown-Forman does not intend to comment further unless and until an agreement is reached.”

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