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Pernod
Ricard, owner of Absolut vodka and
Chivas Regal whisky, The Glenlivet,
Aberlour and Jameson Irish whiskey is in
discussions over a potential merger with
Brown-Forman, the US-based owner of Jack
Daniel's.
In whisky business news it has been
revealed that Pernod Ricard is in
discussions over a potential merger with
Brown-Forman, the US-based owner of Jack
Daniel's, in a move that could bring
together one of the world’s largest
spirits groups with the leading producer
of American whiskey.
The two companies confirmed talks on
Thursday, signalling a possible tie-up
that would combine Pernod Ricard's
global portfolio—including Absolut vodka
and Chivas Regal whisky, The Glenlivet,
Aberlour and Jameson Irish whiskey—with
Brown-Forman’s strong position in
American whiskey with Jack Daniel's,
Woodford Reserve and
Forrester whiskies. The French group
currently has limited exposure to that
category, despite its broad
international footprint across Irish
whiskey, Scotch and tequila.
Market reaction to the news was mixed.
Shares in Brown-Forman, which has a
market capitalisation of around $11
billion, rose nearly 9%, while Pernod
Ricard—valued at roughly €16 billion—saw
its shares fall by close to 6%.
Both businesses have been navigating a
challenging operating environment and
have recently introduced restructuring
measures, including job cuts at
Brown-Forman. Demand has softened in key
markets such as the United States, where
consumers have been cutting back on
alcohol consumption due to tighter
budgets and increasing health awareness.
More recently, higher import tariffs
introduced under President Donald
Trump’s administration have added
further pressure.
Tariffs have forced spirits producers to
either absorb rising costs or pass them
on to consumers, weighing on sales. At
the same time, competition from emerging
categories such as cannabis-infused
drinks is adding to the strain on
traditional spirits brands.
A combined Pernod Ricard and
Brown-Forman could unlock "significant"
operational synergies, according to the
companies, although they declined to
comment further while discussions are
ongoing.
Analysts remain cautious about the
strategic impact of such a deal. Javier
Gonzalez Lastra, analyst at Berenberg,
said a merger would not necessarily
address underlying growth challenges,
despite areas of overlap between the two
businesses.
"They have clear overlaps in the U.S.,
there is also some overlap in Europe,"
he said, adding that a deal could
deliver "significant cost savings."
"I see this as a defensive move, given
the industry environment."
TD Cowen analysts noted that
Brown-Forman’s controlling Brown family
has historically resisted major deals,
but suggested the current downturn and
uncertain recovery timeline could make
them more open to a transaction.
Brown-Forman has already taken steps
that could facilitate such a move,
including introducing a policy last
October to provide severance and
benefits to executives in the event of a
change in control. The company said at
the time that the measure formed part of
a routine review of governance and
compensation structures.
According to reports, any potential
agreement would likely include a
substantial stock component, with the
founding families of both companies
retaining significant ownership stakes
in the combined entity.
The discussions come as the global
spirits industry grapples with a
prolonged slowdown, marked by declining
sales, falling valuations, leadership
changes and asset disposals as companies
look to cut costs and protect margins.
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