An American icon in the hands of the French? The fight for the producer of Jack Daniels continues

Will Jack Daniels become French whiskey? That's about to happen. According to circulating rumors, Pernod Ricard SA is keen on whiskey (without ice, of course, and certainly without cola). This puts it in an alcoholic competition with the American company Sazerac Co., which also presented its takeover proposal.

Jack Daniels maker Brown-Forman Corp. believes that a French partner would be more advantageous for it in terms of diversification, both in terms of alcohol and geographically. In addition, this transaction guarantees the family currently managing the company greater shares in the business, and therefore greater influence – reports “Bloomberg”.

Pernod Ricard is the favorite to take over the producer of Jack Daniels

In addition, the producer of Jack Daniels and a French company that offers, among others, Woodford Reserve whiskey, Herradura tequila and Diplomatico rum have more in common. Both are family businesses with a long tradition. Their merger would strengthen their position and expand the reach of both companies to a “global” level. In particular, Brown-Forman, thanks to Pernod's extensive distribution network, would have a better path to bringing the Jack Daniel's brand to markets in China and India, where demand for whiskey is growing.

Sazerac, on the other hand, is more focused on the US market. His portfolio is dominated by whiskey. Together with Brown-Forman, they would control over 30 percent. the American whiskey market, and this could lift reservations related to antitrust regulations.

Talks with both companies are still ongoing. According to the New York Times Sazerac wants to pay USD 15 billion for the producer of Jack Daniels (currently the company's capitalization is approximately USD 13.4 billion). In turn, the transaction with the French partner is to be settled in 80%. in shares, and 20 percent – in cash.

The crisis on the alcohol market in the US is accelerating consolidation

The alcohol industry in the US is going through difficult times. The tariffs introduced by Donald Trump have broken the neck of demand for these products, especially premium ones. In addition, there are demands from wholesalers and retailers who want to save supply by reducing prices. Against the background of this pessimistic market picture, Brown-Forman fared even worse. According to Bloomberg's calculations, the company's share in the global market for strong alcohols dropped to 5.9 percent last year. (which gives it 8th place overall) from 6.3 percent. in 2021.

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