Pernod Ricard and Brown-Forman confirmed on Tuesday that they have ended merger discussions after the two spirits groups were unable to reach mutually acceptable terms. The talks, publicly disclosed last month, had explored a potential combination that would have merged the world's second-largest spirits company with the leading U.S. whiskey producer.
During the period of negotiations, Sazerac - an American spirits group whose portfolio includes Corazon tequila and Svedka vodka - emerged this month as an additional bidder for Brown-Forman. Reports during the process described competing proposals from the French and American suitors.
Pernod Ricard issued a statement asserting its continued commitment to its existing strategy and operating model:
"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,"
Brown-Forman, whose shares fell roughly 5% in extended trading, said it will concentrate on "strategic and operational priorities," naming as an example the goal of "unlocking future growth by expanding our geographic footprint."
Decision and rationale
A Pernod spokesperson told Reuters that the decision to end talks was "mutual" and made in the best interests of shareholders. The spokesperson added that the outcome reflected a "combination of elements" related to deal structure and economics, and was not the result of any single issue. The spokesperson clarified that these elements, rather than debt structure, were central to the decision.
One source indicated the family that controls Brown-Forman - the maker of Jack Daniel's - preferred a potential sale to the French distiller over the rival Sazerac proposal.
Proposals on the table
Under the terms that had been discussed with Pernod Ricard, the offer would have combined cash and stock and been structured in a way to allow the Brown family - which has controlled the company since 1870 - to retain a meaningful ownership stake and to preserve some degree of influence within the combined entity.
By contrast, Sazerac's approach was reported to value Brown-Forman at about $15 billion, or roughly $32 per share. Industry advisers said the Sazerac proposal would likely require an all-cash financing package with higher leverage, a structure that would effectively oblige the Brown family to give up control.
Outlook and next steps
With merger negotiations concluded, Brown-Forman has signaled a return to internal priorities and growth initiatives, including expanding its global reach. Pernod Ricard emphasized continuity in its strategic plan and confidence in its teams to deliver long-term value. Neither company provided further details about any renewed acquisition activity or timelines for potential future discussions.
The companies' public remarks and the competing proposals leave open questions about ownership preferences and the relative attractiveness of cash-and-stock versus all-cash offers, but both parties have indicated the decision to stop talks was consensual and based on the economics and structure of a possible deal rather than a single discrete obstacle.