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Pernod Ricard leads Tequila chase

Published:  23 July, 2008

By Ron Emler
Patrick Ricard, the chairman of Pernod Ricard, has made no secret of his desire to own a major brand of tequila, and reports from New York suggest he is close to fulfilling that ambition and plugging a significant hole in the portfolio of the world's second-largest wines and spirits company.

Pernod Ricard is said to be the front-runner for one of Mexico's biggest producers of the white spirit, Herradura, which put itself up for sale earlier this year. The company is smaller than Jose Cuervo, which is owned by Diageo, but analysts estimate it could be worth up to $800 million (430 million).

The addition of Herradura to its portfolio would be a double boost for Pernod Ricard. It would give it a leading brand in the rapidly growing tequila market plus wider access to the Mexican market. However, the French company is facing strong competition in the auction. Both Brown-Forman, which owns Jack Daniels and Southern Comfort, and Bacardi have submitted tenders in the final round of bids, which closed about two weeks ago.

Pernod Ricard was forced to relinquish the Sauza tequila brand to Fortune Brands as part of their joint takeover of Allied Domecq last year.

New York sources suggest that should Pernod Ricard fail to land Herradura it could then turn its attention to Patron Spirits, a Nevada-based producer of rum and tequila-based products. That, however, would be a more difficult purchase as the company is reckoned to be worth up to $2 billion.