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Does US election throw Cuervo IPO into doubt?

Will drinks group Jose Cuervo further delay its planned IPO following Donald Trump’s surprise victory in the US presidential election and subsequent devaluation of the Mexican peso?

Jose-Cuervo
Will volatility following the surprise US election result further delay Jose Cuervo’s IPO?

Last month, Reuters claimed the world’s largest Tequila producer postponed its IPO on the grounds of market volatility ahead of the US presidential election, which took place yesterday (8 November).

Despite polls forecasting as much as a five-point lead for Democratic candidate Hillary Clinton, Republican nominee Donald Trump clinched a shock victory overnight.

As the results came in, the Mexican peso fell by more than 13% against the US dollar to an all-time low. The currency has since regained some ground, but is still down 8.6% as of 10:40 GMT.

In addition to market volatility, there is considerable uncertainty over US/Mexico trade policy. Trump has pledged to “renegotiate” the North American Free Trade Agreement between the US, Canada and Mexico, which may see tariffs increase.

Jose Cuervo’s IPO, which could raise as much as US$1 billion, was postponed over market uncertainty linked to the US presidential election. With the Trump victory, this is unlikely to be quelled in the short term.

The drinks group, which acquired Bushmills Irish whiskey from Diageo as part of a brand swap in November 2014, officially filed an initial public offering document with Bolsa Mexicana de Valores, the Mexican stock exchange, in September 2016.

The Spirits Business has approached Jose Cuervo for comment and will update the story in due course.

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