The maker of Jack Daniels and Southern Comfort, Brown-Forman Corp., has acquired a Mexican tequila maker for $876 million adding Herradura and El Jimador tequilas to its stable of brands.
The deal with Grupo Industrial Herradura, S.A. de C.V., also adds the New Mix tequila-based ready-to-drink brand as well as tequila production facilities and a sales and distribution organization in Mexico under Brown-Forman’s wing. The company, known as Casa Herradura, has about 1,000 employees and reported net sales during 2005 of about $200 million.
Herradura is one of the top-selling super-premium tequilas in Mexico. El Jimador is one of Mexico’s best-selling premium tequilas and has been growing rapidly in the U.S. over the last few years, Brown-Forman said.
The addition of the brands is Brown-Forman’s most significant investment in Mexico, where the company has a number of interests, and will aid in the company’s international expansion, Brown-Forman CEO Paul Varga said in a statement.
“These brand will help us advance our business within the growing Hispannic population of the U.S. and increase our participation in the exciting U.S. cocktail culture,” he said.
The deal is expected to close before the end of the year. In 2005, the U.S. represented about 46% of the global tequila volume, while Mexico—tequila’s home country—accounted for 40% of sales. The remaining 14% was spread throughout the world. In the U.S., tequila is the eight largest spirits category, representing less than 6% of the total distilled spirits market, compared to Mexico, where tequila is the largest spirits category with about 42% market share, compared to 24% for brandy and 17% for rum, Brown-Forman said.
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