Home / Business and Economy / Pernod Ricard Abandons Brown-Forman Takeover Bid
Pernod Ricard Abandons Brown-Forman Takeover Bid
29 Apr
Summary
- Pernod Ricard ended merger talks with Brown-Forman due to unmet terms.
- Industry downturn and consumer shift to cheaper brands impact sector.
- Brown-Forman's shares fell 6% post-announcement; Pernod's down 31%.
Pernod Ricard, known for Absolut Vodka and Jameson's whiskey, has officially ceased its pursuit of Brown-Forman, the owner of Jack Daniel's. The French spirits giant announced Tuesday that merger talks did not result in an agreement due to mutually unacceptable terms. Brown-Forman confirmed the end of these discussions.
The potential tie-up aimed to create a leading spirits company with $16 billion in annual revenues. However, the industry is grappling with declining alcohol consumption and a consumer trend towards more affordable brands in key markets like the U.S. and China.
Following the news, Brown-Forman's shares declined by 6% in after-hours trading, with an implied market value of approximately $12 billion. The company's voting stock is controlled by descendants of its founder, making board representation and headquarters a potential sticking point in negotiations.
Analysts suggest Pernod Ricard's withdrawal could open the door for a rival bid from Sazerac, another Kentucky-based spirits group. Sazerac's previously reported all-cash offer valued Brown-Forman at $15 billion, contrasting with Pernod's stock-based proposal. Both companies stated their focus remains on strategic priorities and long-term value creation.
