Pernod Ricard mulls a shot at tequila company as sales rise

 
City A.M. Reporter
FRENCH spirits maker Pernod Ricard yesterday hinted that it could make a bid for tequila powerhouse Jose Cuervo after rival Diageo walked away from a deal.

Pernod Ricard, the world’s second-biggest spirits group behind Diageo, also stuck with its target of full-year profit growth yesterday, thanks to demand from Asia and the US that offset declining sales in France and Spain.

Chief executive Pierre Pringuet said at a press conference that his firm is “open to all forms of discussions” about Jose Cuervo, but stressed that a deal is not imminent.

“We could do tactical acquisitions in the next two years, maybe strategic acquisitions after that,” Pringuet told Reuters.

Pernod, the owner of Mumm champagne, Absolut vodka and Martell cognac, said yesterday it still expected underlying operating profit growth of close to six per cent in the year to June, slowing from nine per cent in the previous year.

Goldman Sachs analysts said in a note they believed Pernod’s guidance was “conservative”.

First-half sales reached €4.91bn (£4.21bn), an underlying rise of three per cent, while underlying operating profit grew one per cent to €1.459bn, Pernod said.

Strong cash flow generation helped cut net debt by €215m to €9.148bn.