New York, September 25, 2008 - Pernod Ricard SA will not have an appetite for acquisitions until about 2011 as it pays down debt from its $8.9 billion purchase of Absolut vodka, the French wine and spirits group's top executive said on Thursday.
That rules out Pernod bidding for UST Inc's Ste. Michelle Wine Estates business should it go on the block following UST's planned acquisition by Altria Group Inc,
Managing Director Pierre Pringuet told Reuters.
"We possibly could be interested, but certainly will not make any moves in that direction. We are not looking at what we cannot afford," Pringuet said. UST's California and Washington wineries could have filled a hole in Pernod's portfolio, which lacks U.S. made wines.
Pernod's debt is currently about six times its operating earnings, but Pringuet said the company is aiming to reduce that multiple to 4.5 to five by June 2010 and four by June 2011. At that time, it will be ready to invest again, Pringuet said.
In the meantime, Pernod plans to focus on existing brands such as Beefeater gin, Martell cognac and Malibu rum, with goals to increase sales and profit margins by selling more higher-end drinks and raising some prices.