US: Fortune Brands seals Cruzan rum deal
Fortune said today (1 October) that the completed deal for Cruzan gave it "an excellent position in the attractive premium rum segment".
The US group has also picked up a US$230m payment from Pernod Ricard, as compensation for Pernod's exit from the Maxxium Worldwide distribution venture, also effective from today.
Fortune, which remains part of Maxxium via its Beam Global Spirits & Wine business, paid $100m for Cruzan, leaving it with $130m of pre-tax proceeds from the deals.
"As the payment from Pernod more than offsets the loss of the remaining cost synergies from the joint venture," said Bruce Carbonari, CEO of Fortune and who also begins life as the group's new chairman from today.
"We're being well compensated. At the same time, we see significant benefits to owning and developing a high-performance spirits sales force in the U.S. that will be sharply focused solely on our own brands."
Cruzan had worldwide net sales of approximately $50m in 2007 on volume of around 750,000 cases, said Fortune, which also owns Sauza Tequila, Jim Beam and Courvoisier. It claimed that Cruzan was the fastest growing rum brand in the US, where it recorded a double-digit sales rise last year.
"Because Cruzan is already sold in the US by the joint venture sales force being transitioned into Beam Global, the company anticipates a smooth integration of the brand into its portfolio," Fortune added.
Fortune's Beam Global business will form a new distribution alliance with The Edrington Group from April 2009. The move follows the exit of Pernod from Maxxium and the planned exit of another partner, Rémy Cointreau, at the end of next March.
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