Pernod Ricard and Jack Daniel's owner Brown-Forman end merger talks
Merger Discussions and Industry Reactions
By Abigail Summerville
April 28 (Reuters) - France's Pernod Ricard said on Tuesday it had ended merger talks with Jack Daniel's owner Brown-Forman, after the companies failed to reach mutually acceptable terms.
Background of the Proposed Merger
The companies disclosed last month that they were in discussions over a potential merger that would have combined the world's second-largest spirits maker with the largest producer of American whiskey.
Emergence of Rival Bidders
Amid the talks, American spirits group Sazerac - which owns brands including Corazon tequila and Svedka vodka - earlier this month emerged as a new bidder for Brown-Forman.
Pernod Ricard's Position
"Pernod Ricard remains fully focused and confident in its strategy and operating model, supported by strong and committed teams across the Group to deliver sustainable long-term value for all stakeholders," the company said on Tuesday.
Brown-Forman's Response
Brown-Forman, whose shares were down about 5% in extended trading, said it intends to "create long-term value for all stakeholders by focusing on our strategic and operational priorities" that include "unlocking future growth by expanding our geographic footprint."
Sazerac's Bid Details
Sazerac did not immediately respond to an emailed request for comment.
Sazerac, controlled by the Goldring family, has offered Brown-Forman about $15 billion, or $32 per share, a source familiar with the matter said earlier this month.
Reasons for Collapse of the Deal
The collapse of deal talks comes despite a source saying that the family that controls the Jack Daniel's maker favors a potential sale to the French distiller over the rival proposal from Sazerac.
Proposed Terms and Stakeholder Influence
The proposed terms for the Pernod deal, which would have combined cash and stock, would have allowed the family that controls the Jack Daniel's maker to retain a meaningful stake and some degree of influence in the combined company, a source told Reuters last week.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Sriraj Kalluvila)
