Despite the alcoholic beverage industry seeing global sales decline by 1.3%, the tequila market grew by 5.2%. With this deal Bacardi aims to become the second biggest spirits company in the United States.
With the aim of becoming the second largest spirits company, by market share, in the U.S., Bacardi Ltd stated it would be acquiring high-end tequila maker Patron Spirits International AG for $5.1 billion.
The purchase marks the first major deal under Mahesh Madhavan, who was appointed Bacardi’s CEO in October 2017 by the family that founded the company, 156 years ago in Cuba, and controls it.
The firm’s high-end tequilas, including Patron’s namesake drinks, have helped it broaden its horizons beyond just young party goers: although the global market for alcoholic beverage has shrunk by 1.3% in 2016, the tequila market grew by 5.2%, according to IWSR, an alcoholic beverage research firm.
In 2017, the industry saw Diageo Plc buying Casamigos, a premium tequila brand owned by George Clooney, for up to $1 billion.
Bacardi, which owns 200 spirit labels, including its namesake white rum, Grey Goose vodka, and Bombay Sapphire gin, has a minority stake in Patron since 2008.