Pernod Ricard and Jack Daniels owner Brown-Forman have confirmed the two spirits groups are locked in talks over a potential transatlantic merger.
A deal would bring together a suite of premium alcohol brands, including Havana Club, Martell and Ballantine’s on the Pernod side and Woodford Reserve, Old Forester, El Jimador and The Glendronach within the Brown-Forman portfolio.
Together, Pernod and Brown-Forman would generate annual revenues of almost €15bn, with the former group bringing the lion’s share.
If a deal can be reached, the partnership would be a “merger of equals”, according to a statement from Pernod Ricard, confirming the discussions.
“The contemplated combination would create a global spirits leader with enhanced scale, a powerful brand portfolio, and a balanced geographic footprint, all anchored by two iconic families,” the statement from the French group said.
“Operational synergies would be significant, leveraging Brown-Forman’s iconic brands, including Jack Daniel’s, and Pernod Ricard’s global distribution strength and exposure to highest growth potential markets.”
Kentucky-headquartered Brown-Forman added: “Synergies from the contemplated combination are expected to be significant, creating a global spirits leader with enhanced scale, a powerful brand portfolio, and a balanced geographic footprint, all anchored by two iconic families.”
Both groups said there was no guarantee an agreement would be reached and neither planned to issue further comment until a deal is struck or talks fall apart.
Pernod and Brown-Forman have struggled against industry-wide challenges of later, particularly a decline in demand in China and the US as battered consumers opt out of buying premium spirits. Spirits groups are also battling reduced alcohol consumption more generally, hits from tariffs and disruption from geopolitical events.
Shares in Pernod have lost more than a fifth of their value in the past year, while Brown-Forman have slumped by a quarter.
Jefferies said there was “significant merit” in a merger of the two companies. “The industry is going through a lull and a merger would provide savings for reinvestment to kick start growth and drive greater scale,” said analysts Edward Mundy. “We see strategic and commercial benefits to a tie up and culturally we believe both businesses would see eye to eye, especially if the deal structure would allow for continued family control.”
However, Laurence Whyatt of Barclays warned mergers of equals were rare for good reason. “We see challenges ahead, which we think will need careful consideration if this deal is going to get over the line,” he added.
Trevor Stirling of Bernstein said: “The deal per se would not fix the biggest challenge facing the two companies: top-line growth. This is also the key issue for most investors. Indeed, there would probably be a lot of disruption when the detailed portfolio structures would be crafted and during the inevitable organizational realignments.”
Brown-Forman employs about 5,000 employees worldwide and sells its spirits to more than 170 countries. Its annual sales decreased 5% to $4bn in 2025, with the group blaming ongoing macroeconomic and geopolitical uncertainties for negatively impacting consumer confidence and reducing discretionary spending in many of its top markets.
Organic sales at the Paris-headquartered Pernod dropped 5.9% to €5.3bn in the six months to 31 December 2025, which was worse than feared by analysts. The group saw large declines in China and the US during the half.
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