FRANCE/UK: Pernod Ricard backs away from pass at Beam Inc
Pernod Ricard has followed Diageo in giving Beam Inc a wide berth
The company, which issued its full-year results last week, is set to continue with its aim to bring down debt in the next year, meaning that its M&A activity will be limited to “tactical moves” only. Speaking to journalists at a briefing in London this morning (6 September), Pernod's managing director of finance, Gilles Bogaert, re-emphasised where the French company's attention lies.
“We have clearly stated that our priority has been debt reduction,” said Bogaert. “In terms of M&A, a massive acquisition short-term is not on the agenda.” When asked if he considered US$8bn or $9bn as massive – Beam Inc would be expected to cost around $9bn should a company look to buy it – Bogaert said: “I think we could call that massive, yes.”
“We are open to tactical moves that would be consistent with our deleveraging objectives,” Bogaert added, highlighting Pernod's tie-up with Tequila Avión earlier this year.
At the end of June, Pernod's debt level stood at EUR9.04bn (US$12.7bn), a net debt/EBITDA ratio of 4.4. The firm has set a target of a ratio of "close to four" by the end of June, 2012.
“We won't do anything short-term that would be contrary to that [deleveraging] objective,” Bogaert concluded. “Consolidation will go on in this sector; there will be many opportunities in the future.”
Speaking exclusively to just-drinks last week, Diageo's CEO, Paul Walsh, intimated that the drinks giant will also refrain from throwing its hat into the ring for Beam Inc. The US-based spirits firm is set to become a standalone publicly-listed business early next month, prompting speculation that it will become a takeover target shortly afterwards.
just-drinks covered this morning's briefing on Twitter - to follow just-drinks, click here.
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