Bacardi to acquire Patrón Tequila
Independent spirits producer Bacardi is to acquire Patrón Spirits International in a deal that values the Tequila maker at US$5.1 billion.
The deal, which is expected to close in the first half of 2018 and is subject to customary closing conditions, will see Bermuda-based Bacardi purchase 100% of Patrón Spirits International and its namesake ultra-premium Tequila brand, Patrón. Bacardi first bought a “significant” minority stake in the brand in 2008.
Citing IWSR data, Bacardi said full ownership of Patrón will make it the second largest spirits company by value market share in the US, and the number one super-premium spirits player in the country.
According to The Spirits Business’s Brand Champions data, Patrón is one of the strongest performers in the Tequila segment, recording a 13% uplift in volume sales in 2016, hitting 2.47m nine-litre cases.
“We started this business more than a quarter century ago with a singular mission – to create an ultra-premium, luxury Tequila,” said John Paul DeJoria, who founded Patrón Tequila with Martin Crowley.
“Today, with that continued commitment to quality and several other extraordinary brands in our portfolio, we produce more than three million cases of distilled spirits annually that are enjoyed around the world. I am proud of what our entire organisation has accomplished, and the work we do in giving back to the people and communities in which we operate.”
DeJoria will continue to work with Patrón as its ambassador in the role of chairman emeritus. Patrón’s leadership team, including chief executive officer Edward Brown, chief operating officer David R. Wilson and chief marketing officer Lee Applbaum, will continue in their roles.
Brown said: “As Bacardi has had an ownership stake in Patrón for almost a decade now, and truly knows and appreciates our unique business, they are the best and most logical steward to continue our pursuit of perfection.”
Mahesh Madhavan, CEO of Bacardi, commented: “Adding Patrón 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 Patrón around the world, increasing scale in the US and globally.”
Patrón Spirits International also owns the Roca Patrón, Gran Patrón, XO Cafe, and Citrónge line extensions in its Patrón Tequila portfolio, as well as the Pyrat rum and Ultimat vodka brands.
Patrón Tequila will join Bacardi’s Tequila stable, which includes the Cazadores and Corzo brands.
A swathe of acquisitions have been made in the Tequila category in recent years as firms capitalise on its long-term potential. Last year, Diageo acquired George Clooney’s ultra-premium Casamigos Tequila brand in a deal worth up to US$1bn, after swapping its Bushmills Irish whiskey for full ownership of Don Julio in 2015.
Meanwhile, Pernod Ricard completed its full acquisition of Avión Tequila just this month after buying 84% of the brand in 2014. A number of smaller and mid-sized players have also entered the fast-growing category, which will hit 302.4m litres in 2017, according to predicted figures from market analyst Euromonitor.
Bacardi itself has experienced a transformative few years. From 2015 to now, the company has made a number of high profile acquisitions, taking minority stakes in Ilegal Mezcal, Scotch blender Compass Box and Irish whiskey maker Teeling, as well as majority stakes in Bank’s rum, Leblon cachaça and Angel’s Envy Bourbon.