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Brown-Forman Sells Struggling Southern Comfort And Tuaca To Sazerac For $544 Million

January 14, 2016

Brown-Forman has agreed to offload its struggling Southern Comfort brand, along with Tuaca liqueur, to Sazerac Co. for $544 million. The deal is expected to close by March 1, and result in a one-time operating income gain of $475 million for Brown-Forman in its current fiscal year.

Both Southern Comfort and Tuaca have declined markedly in recent years. A decade ago, Southern Comfort was at around 1.5 million cases, but since then has fallen to just above 1 million cases. Tuaca was at around 135,000 as recently as 2008, but is now below 85,000 cases.

Sazerac chairman Bill Goldring told Shanken News Daily he’s confident that his company can turn the brands around. “We think we can improve their performance, as we’ve done with just about every brand we’ve acquired over the years,” he said. “One key reason why Southern Comfort has struggled is that it’s been losing share to (Sazerac-owned) Fireball. We think those brands can work well together—and we’re confident that our sales force can get Southern Comfort back on track.”

For Sazerac, the deal comes as Fireball, which has surged in recent years, has seen its growth ease. In 2015, Fireball was up 16% to 4.6 million cases to become the sixth-largest brand in the U.S. spirits market, according to Impact Databank. However, that rise represents a significant slowdown from the pace that saw it grow from just 100,000 cases in 2010 to 3.9 million cases in 2014.

In September, rumors surfaced that Brown-Forman was also mulling the sale of its Chambord liqueur brand. Thus far, Chambord remains in the Brown-Forman portfolio.

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