Bacardi Ltd is tapping into the fast-growing market for tequila by acquiring Patron Spirits International AG in a deal valuing the company at US$5.1 billion.
The purchase is to combine two of the world’s largest closely held distillers, putting Grey Goose vodka, Dewar’s scotch and Bacardi rum under the same banner as Patron’s famous tequilas.
The merger is to give incoming CEO Mahesh Madhavan a prestigious brand as he works to expand Bacardi’s global footprint.
Photo: AFP
The executive, who is poised to take the reins on April 1, plans to boost sales by getting overseas consumers to trade up from local spirits.
Bermuda-based Bacardi, which already sells Cazadores tequila, accounted for 5.8 percent of the total alcoholic beverage market last year, research firm IRI’s data showed.
“Adding Patron to the Bacardi portfolio creates a tremendous opportunity for the brand outside of the United States, as Bacardi’s international distribution network will help grow Patron around the world, increasing scale in the US and globally,” Madhavan said in a statement.
Bacardi is to tap debt markets to help finance the deal, according to a person familiar with the deal.
Bacardi acquired an initial 30 percent stake in Patron for less than US$500 million in 2008, said the person, who asked not to be named because the details are private.
Agave-based beverages, which include tequila and mezcal, have seen sales accelerate over the past decade.
Super-premium tequila grew eightfold between 2002 and 2016, the Distilled Spirits Council trade group said.
That is attractive compared with other spirits segments, such as rum and vodka: rum volumes declined by 0.2 percent in the same period, and vodka gained 2.4 percent.
The combined company could be the top spirits maker in the super-premium segment in the US, IWSR data showed.
Patron, an early pioneer in the market for upscale tequila, was founded by John Paul DeJoria and Martin Crowley in 1989.
DeJoria — who was once homeless, according to a biography on Patron’s Web site — initially found success in hair care company John Paul Mitchell Systems before helping to start Patron, where he now serves as chairman.
The company succeeded in marketing the spirit to a more sophisticated clientele and broadening its market base.
The deal with Bacardi helps cement tequila’s status as a key product in the global market for spirits.
As sales in the category surged, Diageo PLC last year paid US$1 billion to acquire George Clooney’s start-up Casamigos.
Pernod Ricard SA also boosted its tequila portfolio by acquiring the Del Maguey brand in June last year.
Becle SAB, the producer of Jose Cuervo tequila, rode the wave by raising US$790 million in an initial public offering a year ago.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six