Buffalo Trace Owner Sazerac in Talks to Acquire Brown-Forman: Report
A few weeks after the news surfaced that French drinks company Pernod Ricard was in talks to acquire or merge with American spirits company Brown-Forman, another big name has entered the picture. Buffalo Trace parent company Sazerac is now in the mix as well, and it has approached Brown-Forman about a deal, according to The Wall Street Journal. If this were to happen, it would mean that two of the biggest American whiskey companies in the business would join forces.
Both names are major operations: Brown-Forman owns major whiskey brands like Jack Daniel’s, Woodford Reserve, and Old Forester and is worth about $12.4 billion, according to reports. Sazerac, meanwhile, produces highly collectible labels like Pappy Van Winkle (in partnership with the Van Winkle family), the Antique Collection, and W.L. Weller and is estimated to be worth close to $10 billion.
This news comes at a time when the whiskey business, and the spirits industry in general, has been struggling. Major companies like Diageo and the James B. Beam Distilling Co. have paused production at some of their distilleries, and sales across the board have been down globally. The American whiskey market is facing a glut at the moment and has hit some of its lowest levels of production, and tariffs have wreaked havoc on exports, particularly in Canada. The latter is something that Brown-Forman has singled out as affecting its financial picture, and the company has laid off people and sold off one of its cooperages over the past couple of years.
Sazerac, however, seems to be weathering this downturn in stride, and in fact has been expanding its footprint in American whiskey. Earlier this week, the company announced that it will launch its first Tennessee whiskey later this summer. It will be produced at the AJ Bond Distillery, the site that it renamed after purchasing the former Popcorn Sutton facility about a decade ago. Last spring, Sazerac launched its first Irish whiskey, Garavogue (which we gave a very high rating at the time), that is being produced (not distilled) at the renamed Hawk’s Rock Distillery in Ireland. And just last fall, we reported on the company’s $1 billion expansion of building new warehouses in Campbellsville in Taylor County, Ky., over the next 15 years. Clearly, despite the industry’s troubles—which, to be clear, are real—Sazerac is feeling bullish about the future.
It remains to be seen what will actually happen with either Brown-Forman deal, whether it will merge with another well-known American company, be acquired by a French conglomerate, or remain independent. In the meantime, Sazerac stocks are reported to be up, so investors are looking at this interest as a positive sign. We will continue to report on this deal as new developments occur.
