Pernod Ricard CEO Pringuet Says He Has No Plans to Make Any Acquisitions
Pernod Ricard Chief Executive Officer Pierre Pringuet
Jean-Claude Coutausse/Bloomberg
Pernod Ricard Chief Executive Officer Pierre Pringuet.
Pernod Ricard Chief Executive Officer Pierre Pringuet. Photographer: Jean-Claude Coutausse/Bloomberg
Pernod-Ricard SA, the maker of Chivas Regal and Absolut vodka, has no plans to make acquisitions as it focuses on innovating its own brands.
“Today, the strategy is extremely clear: no acquisitions,” Chief Executive Officer Pierre Pringuet said in an interview in Paris, when asked if he was interested in Fortune Brands Inc.’s drinks unit. He said that there is no “clear gap” in Pernod’s portfolio of products.
After three “major” purchases in the last eight years, Pernod is focusing on growing without making more, Pringuet said. The acquisitions include buying Allied Domecq Plc in 2005.
Fortune, the maker of Jim Beam bourbon, said in December it plans to split into three separate units, spurring speculation that companies including Pernod and Diageo Plc, the world’s biggest spirits company, may bid for its drink brands.
Distillers are seeking to expand into new categories, price ranges and geographies through acquisitions and product introductions as consumers in developed markets including Europe and the U.S. become harder to please. Pernod wants “to be the most innovative” distiller in the world, Pringuet said.
While Pernod would probably like to own some of Fortune’s spirits brands, its “high leverage” means it is “unlikely to be in a strong primary buyer position versus players like Diageo and/or Bacardi,” analysts including Trevor Stirling at Sanford C. Bernstein in London wrote in a note dated Jan. 10.
Not a Necessity
Pernod has the highest ratio of net debt-to-earnings before interest, tax, depreciation and amortization of the major European distillers, according to Bloomberg data.
According to Pringuet, the Paris-based company isn’t short of any particular spirit categories.
“Maybe I’m thinking ‘we lack a bourbon whiskey.’ It’s nice enough, but is it a necessity? No.”
Pernod sold its Wild Turkey bourbon brand in 2009 to Davide Campari-Milano SpA to cut debt after buying V&S Vin & Sprit AB.
The Allied Domecq acquisition and the purchase of Vin & Sprit added brands including Absolut and Beefeater gin. The moves “were all transforming acquisitions,” Pringuet said.
Acquiring Absolut was “necessary to strengthen our position in the U.S. and have growth in many other markets.”
Pernod rose 60 cents, or 0.8 percent, to 71.66 euros as of the 5:30 p.m. close of trading in Paris.
To contact the reporter on this story: Clementine Fletcher in London cfletcher5@bloomberg.net.
To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net
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