By Tam Allenby and Andy Young
Bacardi Limited will acquire 100 per cent ownership of Patrón Spirits International AG and its PATRÓN brand, the world’s top-selling ultra-premium tequila.
The deal values Patrón at US$5.1bn and, subject to customary closing conditions, is expected to close in the first half of this year.
Citing the most recent IWSR data, Bacardi said that the transaction will make it the number-one spirits player in the super-premium segment in the US and the second largest spirits company (in market share by value) in the “critically important” US market.
“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,” said Mahesh Madhavan, CEO of Bacardi Limited.
Bacardi has owned a minority stake in Patrón since 2008, with Barry Kabalkin, Vice Chairman of Bacardi Limited, also a member of Patrón’s board of directors since that time.
Commenting on the deal, Kabalkin said: “Patrón is one of the world’s most coveted spirits brands, and we are thrilled to take our long-standing relationship to the next level. Working with the extraordinary team at Patrón, for whom we have the highest possible respect, we will stay true to or shared values.
“Patrón is a brand that transcends the tequila category and will uniquely complement the Bacardi portfolio of premium brands.”
Tequila is one of the fastest-growing and most attractive categories in the spirits industry, with super-premium brands experiencing the fastest growth, a trend that is expected to continue.
Patrón was founded by entrepreneurs John Paul DeJoria and Martin Crowley, whose aim at the time was to create a tequila that was “simply perfect”.
“We started this business more than a quarter century ago with a singular mission – to create an ultra-premium, luxury tequila,” DeJoria said.
“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.”
The Patrón leadership team, including Chief Executive Officer Edward Brown, Chief Operating Officer David Wilson, and Chief Marketing Officer Lee Applbaum, will continue in their roles.
“Patrón is more than just a brand we have built; it has been a personal passion for nearly 20 years. I truly consider the Patrón team my extended family,” said Brown. “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.”
The deal follows similar high-profile tequila purchases over the last year, including Diageo’s acquisition of George Clooney’s tequila brand Casamigos in July 2017, but this deal values Patrón at $4.1bn more than Clooney’s tequila.