RUMOR ALERT: BROWN-FORMAN/BACARDI MERGER

Once again, rumors are surfacing that Brown-Forman and Bacardi may form a possible merger. This rumor has been going around for sometime, but is gaining some steam in the press (as rumors so often do) and has landed itself in the April edition of Forbes. In an article by Matthew Swibel, the author points out that B-F has gone down in share price as of late due to the Herradura acquisition and would benefit greatly from a merger with Bacardi.

“Two years ago Brown-Forman seemed poised to benefit from a weakening U.S. dollar by expanding brands like Jack Daniels and Finlandia overseas...but the company's recent purchase of Mexico's Grupo Industrial Herradura, a tequila maker, for $766 million, soured investors. Shares are down to a recent $64.”

“Rumors are swirling about a possible merger with rum maker Bacardi, which already distributes Brown-Forman bourbon and other liquors in the U.K. Such a deal may help Brown compete with Diageo and Pernod Ricard, the two largest spirits companies. It’s more likely that 37-year old board chairman George Garvin Brown IV, the steward of the Jack Daniel’s brand in Europe, Africa, and Eurasia, will continue his clan’s independent streak and relish the greenback’s prolonged misery,” wrote Matthew.