30 September 2008 - Fortune Brands, Inc. today completed the previously announced transactions with Pernod Ricard to accelerate the end of the U.S. spirits distribution joint venture with Pernod's V&S Group brands and to also acquire the Cruzan Rum brand.
As a result, Fortune Brands has received $230 million in pre-tax proceeds from Pernod Ricard to end the U.S. distribution agreement effective October 1, 2008. As of that date, the company’s Beam Global spirits unit will integrate the joint venture sales force into its own operations, simplifying its route to market in the U.S. and providing greater control over its own sales and distribution in its largest market.
Additionally, Fortune Brands has completed acquisition of the Cruzan Rum brand from Pernod Ricard for $100 million, giving the company an excellent position in the attractive premium rum segment.
“These transactions serve our shareholders very well and enable our spirits business to pursue accelerated growth with clarity, confidence and a simpler sales structure in our largest market,” said Bruce Carbonari, chairman-elect and chief executive officer of Fortune Brands. “As the payment from Pernod more than offsets the loss of the remaining cost synergies from the joint venture, we’re being well compensated. At the same time, we see significant benefits to owning and developing a high-performance spirits sales force in the U.S. that will be sharply focused solely on our own brands. We’re also excited to enhance our portfolio with the Cruzan Rum brand, which establishes a growing position for us in the attractive premium rum category.”
With strong double-digit growth in 2007, Cruzan is the fastest growing rum brand in the U.S. Because Cruzan is already sold in the U.S. by the joint venture sales force being transitioned into Beam Global, the company anticipates a smooth integration of the brand into its portfolio. Cruzan joins the company’s portfolio of premium global brands that includes Jim Beam and Maker’s Mark bourbons, Sauza tequila, Canadian Club whisky, Courvoisier cognac and Laphroaig single malt Scotch. Cruzan had worldwide net sales of approximately $50 million in 2007 on volume of approximately 750,000 cases. The acquisition includes the Cruzan distillery on St. Croix, as well as inventory.
The company’s Beam Global spirits business is the fourth largest premium spirits business in the world, and its case volume going forward will be the second largest in the U.S.