Pernod Ricard's attitude to M&A softening in 2011?

Is it a case of cultural differences, or is Pernod Ricard playing a bit coy on its attitude to mergers and acquisitions?

Pernod's CEO, Pierre Pringuet, told journalists in London today (23 February) that acquisitions for the French group are "absolutely not on the agenda".

It's a message we've heard consistently from the Chivas Regal producer in the last couple of years, during which time it has sought to cut debt in order to digest the pricey EUR5.6bn (US$7.5bn) acquisition of Absolut vodka owner Vin & Sprit.

However, in 2011, there is less and less reason to believe that Pernod's mantra on M&A has no reverse gear. Firstly, debt has come down nicely. The group finished calendar 2010 at a debt to EBITDA ratio of 4.5 times. It is aiming for a ratio of around 4 times by the end of its next fiscal year, to the end of June 2012.

Pringuet himself said today that a ratio of 4 times is perfectly comfortable for spirits companies.

Secondly, opportunities for acquisitions are looming larger on the horizon than they were at the height of the financial crisis. It's easy to excuse yourself from the M&A dinner table when there's nothing to eat, but times are changing.

There is the suggestion, for example, that Pernod's board is open-minded, at least, about plucking some brands out of a potential break-up of Beam Global Spirits & Wine. Pringuet said today that the group could return to M&A at "some point in the future".

In terms of Beam Global, timing could be key.

Analysts strongly expect takeoffer offers for Beam Global when its parent group, Fortune Brands, makes the division a standalone entity, expected to happen later this year. Such is the existing consolidation among the spirits sector's top players, one company alone is unlikely to be able to swallow Beam's diverse portfolio. Diageo and Bacardi are, as analysts say, likely frontrunners in a race for Beam.

But, there is a growing sense that Pernod may be waiting in the wings to cherry-pick. The French group will be hoping that the platter of Beam brands is not served up too early.