FRANCE: No "major" M&A for Pernod Ricard - analyst

By | 26 October 2012

Pernod is likely to stay away from major M&A for the forseeable future, Nomura said

Pernod is likely to stay away from major M&A for the forseeable future, Nomura said

Pernod Ricard remains unlikely to be involved in any "major" M&A activity while its concentrates on delevergaing, according to an analyst. 

The French group yesterday (25 October) reported first-quarter group sales growth of 5%, but pointed to a slowdown in some of Asia's emerging markets. Pernod said in April that it had completed the refinancing of the debt it accrued when it bought Vin & Sprit in 2008.

But, while its competitor Diageo is currently eyeing two significant acquistions, analyst Nomura has predicted that Pernod will not follow. 

"With the focus still on deleveraging, we do not see the company as active in major M&A," Nomrura said in a note today. 

"The historical model of owning 100% of brands and distribution argues against involvement in agency brands or joint ventures, which could grow the business without major capital requirements." 

Nomura suggested that Pernod will face some "headwinds" in 2013, with its high exposure to France and Western Europe. It predicted "some slowdown in overall medium-term growth for the company". 

"With a strong Q2 comp and a number of technical factors, we estimate Q2 revenues down 2%, with a likely strong rebound in H2," the note said.

Overall, however, Nomura noted: "We continue to see a strong growth dynamic in global spirits."

Expert analysis

Pernod Ricard SA - SWOT, Strategy and Corporate Finance Report

Pernod Ricard SA - SWOT, Strategy and Corporate Finance Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, product and service offerings, detailed financials, and corporate actions, providing a 360° view of the company.

Sectors: Spirits, Wine

Companies: Pernod, Ricard, Diageo

There are currently no comments on this article

Be the first to comment on this article

Related research

Pernod Ricard: Premiumization and decentralization fuelling growth in mixed macroeconomic environment

Over the last 10 years of rapid acquisitions, Pernod Ricard has built a strong portfolio of premium brands on a global scale. Most of its brands enjoy a leading position in international markets. The company has adopted a decentralized operational st...

Wine

This report analyzes the worldwide markets for Wine in Million Litres. It includes all wine categories, still, (red, white and rose), sparkling, fortified, vermouth, non-grape wine, wine coolers and ice wine. The report provides separate comprehensiv...

Related articles

just For Subscribers - The week in drinks

Here are the ten most viewed, subscriber-only items on just-drinks this week:

Product Launch - US: Pernod Ricard's Absolut Elyx

Pernod Ricard is launching a small-batch vodka under its Swedish Absolut brand.

Product Launch - JAPAN: Pernod Ricard's Jacob's Creek Wah

Pernod Ricard's Jacob's Creek Wah

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page