Pernod Ricard and Brown-Forman have reportedly held early-stage talks on a potential deal that could see the French group buy its fellow spirits giant.
Shares in the Jack Daniel’s maker were up more than 20% in the wake of a Bloomberg report that said the two spirits giants had held “initial discussions”.
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According to Bloomberg, which cited unnamed sources, Pernod is exploring a possible acquisition of its US peer. The two companies have had early-stage talks about a possible “combination”, the business news outlet said.
Just Drinks has approached Pernod and Brown-Forman for comment.
Following the Bloomberg story, Reuters also reported that the two spirits giants had held talks over a “possible merger”, according to a source familiar with the matter.
A deal would bring together two of the world’s largest distillers. As well as Jack Daniel’s, the Brown-Forman product range includes Herradura Tequila and Diplomático rum. Pernod, the world’s second-largest spirits group behind Diageo, owns brands including Beefeater gin, Absolut vodka and Chivas Regal whisky.
The spirits industry has faced pressure on consumer demand, particularly in major markets including the US and China.
Last month, Pernod reported a 15% drop in its net sales in the US, a decline the company attributed to the “soft” spirits market in the country. The US made up 17% of the company’s net sales in the period. Group sales were down 5.9% organically and 14.9% on a reported basis at €5.3bn ($6.11bn).
Earlier this month, Brown-Forman booked its financial results results for the nine months to 31 January, Brown-Forman saw its reported net sales fall 2% to $3.08bn, Net sales in the US declined 8% and by 1% organically.
Shares in Brown-Forman were up 18.02% at $27.76 at 17:13 GMT today. Pernod’s shares were down 5.73% at €59.94 at 17:37 CET.
