Brown-Forman and Pernod Ricard remain in talks over a potential “business combination”, as fresh speculation links the Jack Daniel’s owner to separate deal discussions with Sazerac. The latest claims surfaced in a Wall Street Journal report published on 9 April, prompting a near 13% jump in Brown-Forman’s share price.
Global Drinks Intel said it understands negotiations between Brown-Forman and Pernod Ricard are still ongoing, after the two companies confirmed in late March that they were in discussions. Each company described the possible tie-up as a “business combination” that, if agreed, would be “akin to a merger of equals”.
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Neither Brown-Forman nor Sazerac Co has commented on the Wall Street Journal’s report, according to Global Drinks Intel. The Wall Street Journal claim said privately owned Sazerac “recently approached” Brown-Forman “about a potential deal”, citing unnamed “people familiar with the matter”, but offered no further detail.
Brown-Forman and Pernod Ricard have not announced any timetable for a decision, and there is no certainty that their talks will lead to an agreement. A “merger of equals” structure usually implies that neither party buys the other outright, and that both sides seek to preserve influence in the combined group, although the exact governance arrangements can vary.
The renewed focus on Sazerac also reflects a history of dealings between the two US whiskey groups. Almost a decade ago, Brown-Forman sold the Southern Comfort and Tuaca brands to Sazerac for just over US$540m (about £430m at current exchange rates), a move that helped Brown-Forman concentrate on its core whiskey portfolio while expanding Sazerac’s position in American spirits.
The report comes at a time when major drinks companies face pressure from changing consumer demand and higher costs, while investors scrutinise growth prospects in mature markets. Consolidation has been a recurring theme in the global spirits sector for years, as groups seek scale in distribution and marketing and try to build stronger portfolios in premium categories.
