Merger Versus Buyout: What Is Going On With The Brown-Forman Deal?

By Richard Thomas

Amid a prevailing slump in sales, 2026 seems to be the year for major whiskey companies and properties to shake things up. Kirin has already nailed down the details for the sale of Four Roses to Gallo, which will see the Japanese brewer depart and the global wine-maker enter the bourbon market. This was followed first by news that Brown-Forman, owner of Jack Daniel’s and Old Forester, was in talks to merge with French drinks goliath Pernod Ricard; and then by the latest development, Wednesday announcement that Sazerac had offered up to $15 billion to buy Brown-Forman outright.

As most whiskey enthusiasts pay little attention to the business and financial side of the whiskey industry–I cannot begin to count how many times I have had to explain the real money for a big whiskey company is made in their mass market products, and not the passionately sought, hard to get unicorn bottles–examining the differences between the Brown-Forman and Pernod Ricard merger and the Sazerac buyout offer, plus some speculation as to what the outcomes could be, is called for.

The Pernod Deal
Although the specific terms of a merger between Pernod Ricard and Brown-Forman are undecided, the broad strokes can be guessed at. The situation dictates a horizontal and market extension merger between the two companies, taking advantage of their complementary assets. Relying on only what we know of the two companies, I suggest who actually owns each firm as the best way to imagine what the eventual deal might look like.

Pernod Ricard is what people imagine when they think “publicly traded company,” as there is no majority shareholder. The Ricard family is the single largest owner, but their share constitutes just 14.29%. The current CEO, Alexandre Ricard, comes from that family. Institutional investors own an additional combined 46% of the company, with the two largest being Groupe Bruxelles Lambert SA and Massachusetts Financial Services Co., each holding between 6 and 7% of shares.

While Brown-Forman is also publicly traded, its ownership profile could not be more different, because the Browns are the majority owners. They own not just a simple majority of the company overall, but the overwhelming majority of the Class A voting stock.

Outside experts believe a key point the Browns want from a merger is to retain control over Brown-Forman’s assets within the new company. Although legal departments exist to find ways around contracted rights and obligations, there is a strong reason to believe the Browns would be able to keep those rights far into a future in a “Brown-Ricard” company. Some back of the envelope math suggests that the Browns would own as much, perhaps even slightly more, of the merged company as the Ricards! I can guess the Browns understood that going into negotiations, and this salient feature may help explain their interest.

The Sazerac Offer
The Sazerac offer is a different animal: they want to buy the control of the company from the Browns. Although it is possible to imagine the Browns negotiating a management interest in, say, Old Forester, as part of the deal, it is unlikely such a thing would extend to Jack Daniel’s, Woodford Reserve or any of the company’s holdings in other spirits.

I believe that for two reasons. First, remember that Maker’s Mark has been owned by somebody not named Samuels for decades, but someone named Samuels continues to run the company. If the Browns wanted to retain direction of their family-founded brand, Old Forester, I’m sure that is something that could and would be arranged.

That said, it’s important to remember that even though Sazerac is offering to buy Brown-Forman, it is the smaller of the two drinks companies! Sazerac has an estimated $3 billion in sales against Brown-Forman’s $5.3 billion. No one in their right mind would undertake such an acquisition and then sign away management of the lion’s share of the resulting company’s assets back to the original seller.

If the Browns took the Sazerac deal, it would be the clearest indicator that they really want to depart from the whiskey business, as some have speculated. Jack Daniel’s, Woodford Reserve, the BenRiach group and other assets would go from being run by the Browns to being run by the Goldrings.

On the other hand, the merger with Pernod Ricard–which addresses certain mutual weaknesses within both companies–could be seen as a response to the recent slide in sales position for Brown-Forman’s crown jewel, Jack Daniel’s. Brown-Forman abandoned vertical integration of its coopering (barrel making) in recent years, and taken altogether it is clear that some loud voices in the boardroom are calling for a shake-up. But most importantly, the merger would not be the exit of the Brown family from the whiskey business, although certainly a change of their role in it.