Tequila leaders Jose Cuervo files for IPO

By Jo Gilbert

Published: 29 September, 2016

The world's largest tequila producer, which has been family owned and run by direct descendants of the actual Jose Cuervo since the 18^th century, is filing for an initial public offering.

The filing, submitted on Tuesday, provided few details about Grupo Cuervo's IPO, but media reports have suggested the company could seek to raise between $750 million and $1 billion.

Historically, Cuervo has resisted offers to sell a stake in the company, and talks with its former international distributor, British spirits group Diageo, ended in late 2012.

At the time, analysts valued the Mexican company at around $3 billion.

Jose Cuervo is currently the leader in the highly competitive Mexican tequila market, accounting for 11.8% of volume share, or 12 million litres, in 2015.

The brand is followed closely by Cabrito from Tequila Centinela SA de CV and Cazadores from Bacardi & Co Ltd, with respective sales of 9.5 and 7.9 million litres each.

However, Jose Cuervo's reach goes well beyond Mexico.

"The brand is the clear leader in the global tequila market, with 52 million litres in sales, or 19% of the market, in 2015," Mark Strobel, senior research analyst at Euromonitor International, said.

"Tequila is also a dynamic category on the world stage, with sales growth in 2015 reaching 5%, considerably outpacing the total spirits category at just 1% growth, which could make it a sought after part of many investors' portfolios.

"The North America tequila market, where Jose Cuervo has the majority of its sales, has also performed particularly well in 2015, with 6% volume growth. Improving global distribution and presence may be a strategic move forward with funds raised from the IPO, especially given the rising competition in its key geographies."

Started by Jose Antonio de Cuervo in the late 1700s, Jose Cuervo claims to be the oldest continually producing spirits firm in North America.

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