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News Alert: Bacardi To Acquire Full Control Of Patrón

January 22, 2018

Bacardi has announced that it has agreed to acquire 100% of Patrón Spirits International in a deal that values the company at $5.1 billion. The deal is expected to close in the first half of this year. Bacardi took a significant minority stake in Patrón in 2008.

“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 U.S. and globally,” said Mahesh Madhavan, CEO of Bacardi Limited.

For Bacardi, the move marks a giant step in the continuing premiumization of its portfolio. In the U.S., Patrón, which essentially created the upscale Tequila category, grew an estimated 8% to 2.5 million cases last year. The brand ranks among just six spirits labels that have U.S. retail sales of above $1 billion, the others being Hennessy, Jack Daniel’s, Smirnoff, Tito’s and Crown Royal.

Following the closing of the deal, the Patrón 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. Moving forward, brand founder John Paul DeJoria will serve as an ambassador for Patrón in the role of Chairman Emeritus and intends “to work with Bacardi in further advancing their combined dedication to philanthropic projects and environmental consciousness.”

The U.S. is by far the world’s largest market for Tequila, accounting for over 80% of all exports, according to the the CRT trade group. Shipments of 100%-agave comprise more than half of all Tequila exports to the U.S., and upscale brands have driven category growth in recent years. Impact Databank estimates that the luxury Tequila segment ($40 and over a 750-ml.) posted an impressive 7.5% gain last year, to 3.5 million cases, with more than two-thirds of that volume coming from Patrón.—Daniel Marsteller

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