The remarkable story of Patrón Tequila - Focus

Bacardi buys Patron - Where does Patron sit in Tequila and what does this mean for Diageo, Pernod Ricard, Gruppo Campari? - Analysis

The Patron portfolio, which includes the Roca range, sells around 3m cases per year

The Patron portfolio, which includes the Roca range, sells around 3m cases per year

Bacardi has upped its holding in Patrón, acquiring the high-end Tequila business outright.

The transaction, announced today, sees Bacardi take full control of Patrón Spirits International, in a deal that gives the company an enterprise value of US$5.1bn. Bacardi's interest in Patrón dates back to 2008, when it bought what it called a "significant minority stake" that just-drinks understands was for 30% of the business.

Specifics of today's deal have not been disclosed.

Upon completion, expected before the end of June, Bacardi said it will become "the number one spirits player in the super-premium segment in the US and the second largest spirits company in market share by value in the critically-important US market". Patrón will subsequently join the Cazadores and Corzo brands in Bacardi's premium Tequila stable.

Founded by entrepreneurs John Paul DeJoria and Martin Crowley, Patron's annual volumes today are around 3m cases. Following Crowley's death in 2003, Bacardi reportedly launched a lawsuit against his estate, to stop it spending around $755m on educating underprivileged children around the world. In January 2007, Crowley's executors agreed that DeJoria could acquire Crowley's 50% holding for $755m, a move Bacardi blocked by claiming it had a prior agreement with Crowley's executors to buy the stake for $175m.

From 2008 - In the spotlight - Bacardi & Patrón

"Patrón is one of the world's most coveted spirits brands, and we are thrilled to take our long-standing relationship to the next level," said Barry Kabalkin, vice chairman of Bacardi and a member of the board of directors of Patrón since the stake purchase. "Patrón is a brand that transcends the Tequila category and will uniquely complement the Bacardi portfolio of premium brands."

Celebrating the first piece of business since becoming Bacardi CEO last year, Mahesh Madhavan said: "Adding Patrón to the Bacardi portfolio creates a tremendous opportunity for the brand outside of the US as Bacardi's international distribution network will help grow Patrón around the world, increasing scale in the US and globally."

Patrón's senior team, including CEO Edward Brown, COO David R. Wilson and CMO Lee Applbaum, will continue in their roles, while DeJoria will serve as an "ambassador for Patrón" in the role of chairman emeritus.

How Patron taught the spirits category to walk the walk - Click here for a just-drinks comment

Expert analysis

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