Pernod Ricard, the world’s n°2 in wines and spirits with consolidated sales of nearly EUR 9 billion (USD 9.9 bn) in 2018, has announced its fourth acquisition in the spirits sector in this year. The company issued today a press statement saying that it has entered into a definitive agreement to acquire all of the outstanding common stock of Castle Brands, maker of Kentucky-based whiskey brand Jefferson's Bourbon for USD 223 million.
Just three weeks ago Pernod Ricard announced the acquisition of Firestone & Robertson Distilling Co., owner of the TX brand, a leading whiskey portfolio headquartered in Fort Worth, Texas.
Pernod Ricard’s third takeover in the U.S. whiskey segment, which was announced in June and completed on 19.07.2019, was the acquisition of a majority share of Rabbit Hole Whiskey, produced and based in Louisville, Kentucky.
“Bourbon is a key category in the US which is our single most important market,” said Alexandre Ricard, Chairman and Chief Executive Officer of Pernod Ricard in todays announcement. “This deal aligns well with our consumer-centric strategy to offer our consumers the broadest line-up of high-quality premium brands. As with our American whiskies Smooth Ambler, Rabbit Hole and TX, we would provide Jefferson’s a strong route to market and secure its long-term development, while remaining true to its authentic and innovative character.”
Another investment of Pernod Ricard this year was the purchase of Italian super-premium gin brand Malfy, a range of super-premium gins distilled by the Vergnano family in the Italian region of Moncalieri, and already present in several international markets such as the United States, United Kingdom and Germany. The purchase was announced on 17.04.2019 and completed on 20.06.2019.
However, Pernod Ricard is not only buying spirits companies but also setting them up by themselves. As it became known today the drinks giant also broke ground in these days of a new 13-hectare whiskey distillery in Emeishan, Sichuan, China, where it will invest one billion RMB (US$150 million) over the next ten years. Production is planned to start in 2021, and the first batch of release is expected after the minimum of 2 years of whisky ageing in 2023.
The site will also include a visitor center where Pernod Riocard hopes to attract more than 2 million tourists within the first decade of its opening.
Created in 1975 by the merger of Ricard and Pernod, the group has undergone sustained development, based on both organic growth and acquisitions: Seagram (2001), Allied Domecq (2005) and Vin&Sprit (2008).
Pernod Ricard holds one of the most prestigious brand portfolios in the sector: Absolut Vodka, Ricard pastis, Ballantine’s, Chivas Regal, Royal Salute and The Glenlivet Scotch whiskies, Jameson Irish whiskey, Martell cognac, Havana Club rum, Beefeater gin, Malibu liqueur, Mumm and Perrier-Jouët champagnes, as well Jacob’s Creek, Brancott Estate, Campo Viejo and Kenwood wines.
Pernod Ricard employs a workforce of approximately 18,900 people and operates through a decentralised organisation, with 6 “Brand Companies” and 86 “Market Companies” established in each key market.
After at the end of last year activist investor and billionaire Paul Singer and his hedge fund Elliott Management Corp. disclosed a stake in the world’s second largest spirits company, it was speculated by Berenberg analysts that Pernod Ricard might be target of a take-over bid by a consortium of luxury group LVMH Moet Hennessy Louis Vuitton and the world’ leading spirits group and Guinness-owner Diageo (inside.beer, 28.2.2019).
However, the stock has performed quite well in the last months. Since the beginning of this year the price per share has appreciated about 15 percent to currently EUR 165,65 which is the highest stock price ever.