Bacardi to buy Mexican high-end tequila maker Patron Spirits for $5.1 bn

Bacardi yesterday struck a deal to buy Mexican high-end tequila maker Patron Spirits International for an enterprise value of $5.1 billion.

The move comes a few days after Pernod Ricard agreed to buy Avion Tequila and months after British spirits giant Diageo acquired Casamigos tequila for up to $1 billion.

The Patron Spirits acquisition is the first major deal made by Mahesh Madhavan, Bacardi's newly appointed CEO. The deal is expected to close in the first half of 2018.

The transaction would give family-owned Bacardi full ownership of Patrón after it held a 30-per cent minority stake in the company since 2008.

As part of the deal, Patrón co-founder John Paul DeJoria will sell his 70-per cent stake in the company. Bacardi's purchase price includes the assumption of Patrón's debt, which is not publicly disclosed.

The deal will make Bacardi the No.1 US spirits player in the super-premium segment, and the second-largest spirits company by market share in the in the US market.

Apart from tequila, the Patrón Spirits portfolio also includes Patrón, Roca Patrón, Gran Patrón, XO Cafe, Citrónge, Pyrat, and Ultimat, as well as limited and special edition distilled spirits.

Patrón Tequilas and liqueurs, Pyrat, and Ultimat vodka are available in more than 100 countries across the world.

Patron, which competes with other brands including Avion, Diageo's Don Julio and Brown-Forman's Herradura, has annual estimated sales of around $675 million.

''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.''

Founded in 1862 and based in Bermuda, Bacardi, the largest privately held spirits company, produces and markets more than 200 brands and labels, including Bacardi rum, Grey Goose vodka, Dewars blended Scotch whiskey and Bombay Sapphire, a premium gin.

Bacardi employs 6,000 people, has 20 manufacturing facilities in 16 markets on four continents, and sells its brands in more than 170 countries.