Analysis - No shopping spree for Pernod Ricard

Most popular

Pernod is buying Malfy for the flavour - comment

The just-drinks Analyst returns

Is Carlsberg treating consumers like suckers

The just-drinks Analyst returns

Why spirits marketers must be more careful


It looks like the days of transformational acquisitions are behind Pernod Ricard. These days, the company is keener to maintain its investment grade rating than embark on a shopping spree.

Since acquiring Vin & Sprit – and subsequently the Absolut vodka brand – in 2008, Pernod has been in more of a divestment mood than an acquisitive one: The US$8.88bn paid for V&S made quite a hole in the company's books.

The last six years have seen a raft of sell-offs, including Wild Turkey to Campari and Bisquit Cognac to Distell in 2009 and Danish aquavit brands Aalborg and Brøndums to Arcus-Gruppen in 2012.

Today, Pernod's net-debt-to-EBITDA ratio stands at 3.6, which is at the healthier end of the company's bracket. But, that's not to say the company is looking to go shopping any time soon.

“We want to retain our investment grade rating,” CEO Pierre Pringuet told journalists at a briefing in London today. “To do this, we'd be allowed to go above four-times net debt to EBITDA, and possibly, for a short period of time, above five times, but certainly not above six times, which was the case for (the purchases of) Seagram's, then Allied Domecq, then Absolut.”

We are more likely, then, to see bolt-on purchases, such as its stake in Avion Tequila from 2011 – since raised to 84% earlier this year - and California's Kenwood Vineyards, which was bought in April.

Back in 2012, Pernod countered: “If you look at the last 12 years, we've been the main consolidator in our industry. We've been very active in M&A; the last (major) deal was just four years ago.”

Two years on, and it's clear to see that, when it comes to big-play M&A, the       Paris-based company is trading on its past rather than its future. And, Pernod seems to be perfectly happy with that.

Related Content

Pernod Ricard Performance Trends 2013-2017 - results data

Pernod Ricard Performance Trends 2013-2017 - results data...

Where will Pernod Ricard look for growth in 2019-2021? - Focus

Where will Pernod Ricard look for growth in 2019-2021? - Focus...

Millennials are not the only fruit for Absolut - Comment

Millennials are not the only fruit for Absolut - Comment...

Vodka stays

Vodka stays "tough" in US, but Absolut investment remains in-line - Pernod Ricard...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..

Forgot your password?