Spirits group, Sazerac, has reportedly put forth a $15 billion acquisition proposal for Brown-Forman (NYSE:BF, NYSE:BF), potentially disrupting the merger plans of the Jack Daniel producer with the French liquor giant, Pernod Ricard S.A. (OTC:PRNDY).
Sazerac has proposed a conventional buyout offer of $32 per share. This contrasts with Pernod’s potential share swap deal, which would allow the Brown family to maintain some control over the bourbon business they have managed since 1870, Reuters reported on Thursday.
Meanwhile, Pernod Ricard’s Chief Financial Officer, Helene de Tissot, told analysts on a conference call that discussions with Brown-Forman are “ongoing,” adding that the company does not plan to provide further updates.
Sazerac and Brown-Forman did not immediately respond to Benzinga‘s request for comments.
Alcohol Slowdown Drives Merger Talks
Brown-Forman has long been viewed as a potential takeover target and has drawn interest before. The merger talks come as declining U.S. alcohol consumption, driven by health trends, GLP-1 drugs, and rising cannabis/THC alternatives, has pressured sales.
The potential $60 billion merger between Brown-Forman and Pernod Ricard signals a shift in the industry cycle and suggests that such consolidations are driven by necessity rather than growth, indicating market pressure.
Meanwhile, New Orleans-based Sazerac has steadily grown its portfolio over the years by acquiring smaller, underperforming liquor brands, including Constellation Brands’ (NYSE:STZ) Svedka and the niche label BuzzBallz.
Pernod vs Sazerac: The Winner?
Morningstar analyst Kristoffer Inton told Reuters that a merger with Pernod would offer stronger growth prospects for Brown-Forman than a deal with Sazerac, as it would help expand into high-growth markets like India and Latin America, where whiskey demand is rising.
On the other hand, some M&A experts feel Sazerac’s advantage is its close ties with Brown-Forman through Louisville’s bourbon industry, and a merger would strengthen their bargaining power with major U.S. distributors.
Price Action: On a year-to-date basis, Brown Forman stock climbed 13.12%, as per data from Benzinga Pro. On Wednesday, it rose 1.23% to close at $29.57.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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