The family that owns Brown-Forman prefers a potential sale to Pernod Ricard over a proposal from Sazerac according to a report by Bloomberg.
Brown-Forman and Pernod Ricard confirming last month that they were in discussions regarding a potential business merger.
Brown-Forman, which produces spirits including Jack Daniel’s and Woodford Reserve, was founded in 1870 by George Garvin Brown and is still primarily owned and controlled by his descendants. The Brown family holds more than 50% of the voting shares in the company.
According to a report in The Wall Street Journal, Sazerac has also approached Brown-Forman seeking a deal between the two whiskey giants. A source has also confirmed the approach to Reuters, with an estimated $US15 billion offer on the table.
A merger between Brown-Forman and Pernod Ricard would create the world’s second biggest spirits maker by sales behind Diageo.
Pernod Ricard CFO Hélène de Tissot told analysts in a recent market update: “Before I begin discussion on our Q3 sales results, I thought I would say a word regarding our press release of 27 March in which we confirm discussions are taking place regarding the potential business combination with Brown-Forman.
“As stated, we did not intend to communicate further until either an agreement is reached or discussions are terminated. Discussions are ongoing, so at this stage, I have no further comment to make.”
A source told Bloomberg that Brown-Forman views Pernod Ricard as a better fit because the combined company would be diversified across geographies and types of spirits. The proposed terms for the combination with Pernod Ricard would also give the family a larger stake in the business and more influence.
The deal under consideration would be 80% stock and 20% cash, people familiar with the matter said.