Pernod Ricard gains family backing in Brown-Forman pursuit
Pernod Ricard is reported to have secured support from the Brown family in its bid to combine with Brown-Forman. The proposed merger of equals is seen as more attractive than a rival takeover offer from US spirits group Sazerac.
Pernod Ricard is said to have the backing of the controlling Brown family in its pursuit of Brown-Forman, the owner of both the Jack Daniel’s and Woodford Reserve bourbon brands.
The American family is reported by Bloomberg to prefer a potential sale to the French group in what has been termed a “merger of equals” rather than the US$15 billion takeover offer from American spirits rival Sazerac.
Deal structure under discussion
While none of the three parties has commented publicly on negotiations, it is reported that the Brown family, who have controlled the Kentucky distiller for five generations since its formation in 1870, prefer the Pernod Ricard proposal.
This, it is rumoured, would involve a deal based on an 80% exchange of shares with the balance in cash to allow Brown-Forman shareholders a premium to the share price when the initial French approach was made.
Competing offer from Sazerac
Sazerac, which itself is controlled by the Goldring family, has offered Brown-Forman about $15 billion, or $32 per share, compared with the $28.94 at which Brown-Forman stood at the close on Wall Street yesterday.
That gives the bourbon distiller a market capitalisation of $13.47 billion compared with Pernod Ricard’s €17 billion ($20.01 billion).
Strategic advantages of a merger
The Browns are understood to consider that Pernod Ricard, which is also effectively family-controlled, has a stronger portfolio of global brands than Sazerac plus a better worldwide distribution network that would generate greater cost savings in the long run.
In addition, a partial exchange of shares would leave the Brown family with an element of influence in the new group through retaining a key shareholding. Sazerac, meanwhile, has proposed a total takeover.
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Financing and debt considerations
While the terms of a deal with Pernod Ricard remain under negotiation in ongoing talks, a 20% element of cash in payment from the French group would involve increasing its debt.
It could, however, seek alternative measures to keep its debt-to-equity ratio near its present levels.
India listing under consideration
The French company has acknowledged, but not confirmed, press reports that it is contemplating an initial public offering of its operations in India, where there is a thriving market for drinks company shares.
India is the group’s second-largest market and is increasingly profitable. In its latest quarter, organic sales rose by 11% compared with the same period in 2025.
Pernod Ricard says it “notes the recent market rumours regarding the potential listing of its Indian affiliate.
“Pernod Ricard regularly assesses and evaluates its strategic opportunities and is continuously exploring options to create value for its shareholders, including optimising its capital structure. This is a usual process in line with management’s mission of delivering value to shareholders, employees, clients and stakeholders.”
“Nonetheless,” the spokesperson added, “Pernod Ricard highlights that, at this stage, no decision has been made regarding any particular action or involving any of these options.”
Comparison with Diageo strategy
Divesting a minority stake in its booming Indian subsidiary would put Pernod Ricard on a similar footing to Diageo, which controls its Indian subsidiary through a 55.58% shareholding in United Spirits. This it acquired through its takeover in 2013 of the stake previously owned by former chairman Vijay Mallya.
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