Pernod may benefit from a Beam acquisition

Pernod may benefit from a Beam acquisition

Beam Inc will become an easier acquisition target from September this year, with Pernod Ricard the likely front-runner as a buyer, according to an analyst. 

Due to the tax-free nature of Beam's spin-off from Fortune brands in 2011, a quick acquisition would have incurred heavy taxes, investment group Exane BNP Paribas said in a note today (7 June). But it added: "Some tax experts have suggested that these could be avoided once a two-year period has elapsed after the spin-off. That time is fast approaching."

The Jim Beam and Maker's Mark producer has "strategic appeal" for Pernod, the note suggests, as the US spirits market continues to boom.  

"Diageo remains the leader of the US spirits market, a position it will continue to enjoy in our view until another player gains sufficient scale to compete on equal terms," the note said. "Beam is potentially the vehicle through which Pernod can achieve this."

However, the analysts warned that Pernod could be constrained by its balance sheet and shareholding structure to do the deal in the next year and would have to finance the acquisititon through debt. 

But the note added: "We believe the Ricard family's desire to maintain its influence over the group will most likely lead to debt being favoured over equity."