Food & Drink

Bacardi Is Buying Patrón for $5.1 Billion

Bacardi Ltd. is looking to get into the tequila business with an offer to buy Patrón for $5.1 billion, according to The Wall Street Journal. If the deal goes through, Bacardi would own the largest premium tequila brand, and move from the fifth-largest spirits company in the U.S. by value to the second largest.

Both companies are privately held. Bacardi has held a 30 percent take in Patrón Spirits International AG for almost 10 years, according to The Wall Street Journal’s unnamed sources. Patrón had U.S. sales of $1.6 billion in 2016, and Bacardi has plans to grow Patrón’s distribution.

Bacardi also owns Grey Goose, Dewar’s scotch, Cazadores tequila and others. As a general category, tequila has been picking up steam as consumers increasingly look for premium agave spirits for sipping and cocktails. Super-premium tequila sales increased 700 percent by volume between 2002 and 2016, according to the Distilled Spirits Council. The largest liquor companies are taking note, with Diageo acquiring Don Julio in 2015 and George Clooney’s Casamigos for $1 billion in 2017.

We’re currently in the midst tequila’s rise, and there’s still plenty of room for growth.

“Adding Patrón to the Bacardi portfolio creates a tremendous opportunity for the brand outside of the United States as Bacardi’s international distribution network will help grow Patrón around the world, increasing scale in the U.S. and globally,” Mahesh Madhavan, Bacardi’s CEO, said in a statement.