FRANCE: No "major" M&A for Pernod Ricard - analyst
Pernod is likely to stay away from major M&A for the forseeable future, Nomura said
The French group yesterday (25 October) reported first-quarter group sales growth of 5%, but pointed to a slowdown in some of Asia's emerging markets. Pernod said in April that it had completed the refinancing of the debt it accrued when it bought Vin & Sprit in 2008.
"With the focus still on deleveraging, we do not see the company as active in major M&A," Nomrura said in a note today.
"The historical model of owning 100% of brands and distribution argues against involvement in agency brands or joint ventures, which could grow the business without major capital requirements."
Nomura suggested that Pernod will face some "headwinds" in 2013, with its high exposure to France and Western Europe. It predicted "some slowdown in overall medium-term growth for the company".
"With a strong Q2 comp and a number of technical factors, we estimate Q2 revenues down 2%, with a likely strong rebound in H2," the note said.
Overall, however, Nomura noted: "We continue to see a strong growth dynamic in global spirits."
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