Brown-Forman sells Southern Comfort and Tuaca to Sazerac
Following months of speculation, Brown-Forman has confirmed the sale of its Southern Comfort and Tuaca liqueur brands to Sazerac for US$544 million.
The announcement comes almost four months after Brown-Forman refused to comment on “rumours” it was planning to offload Southern Comfort, which has struggled to claw back declining sales in recent years.
Reuters also initially reported that Brown-Forman was looking to sell raspberry liqueur Chambord.
A statement from the group, released today, confirmed the Southern Comfort sale to Sazerac in a deal which also included the acquisition of Italian vanilla and citrus liqueur Tuaca.
Brown-Forman said the sale formed part of its “evolving portfolio strategy” and “efforts to focus resources on its highest strategic priorities”.
The firm has owned whisky-based liqueur Southern Comfort since 1979, and Tuaca since 2002.
“We’re proud of the work undertaken over the years by our employees and partners on behalf of Southern Comfort and Tuaca,” said Paul Varga, CEO of Brown-Forman.
“Both brands played important roles in the Brown-Forman success story, and we will have fond memories of the enjoyment they brought to consumers, our partners, and to Brown-Forman.”
Subject to regulatory clearance, the transaction is expected to close on 1 March 2016, giving Brown-Forman an operating income gain of approximately US$475m in fiscal 2016.
Mark Brown, president and CEO of The Sazerac Company, owner of the Buffalo Trace Distillery, said: “We are very excited about the opportunity to acquire such iconic brands. Brown-Forman has done an excellent job of building both brands over the years and we are looking forward to many more years of successful brand building.”
While Brown-Forman reported a “superb” year in 2014/15, boosted by the strength of its Jack Daniel’s portfolio, Southern Comfort experienced a 5% decline in underlying net sales both inside and outside the US.
However, Southern Comfort has struggled to compete with the soaring popularity of the flavoured whiskey sector – in which stablemate Jack Daniel’s Tennessee Honey has pioneered growth.