Rumours swirl over Brown-Forman, Constellation Brands tie-up

U.S. spirits firm Brown-Forman Corp has declined to comment on a story first reported by CNBC late on Tuesday, that “people with knowledge of the matter” said that Constellation Brands “has made an approach to acquire” Brown-Forman.

However, a spokesperson for Brown-Forman said, “As a matter of corporate policy, we don’t comment on market rumours or speculation.

Furthermore, an unnamed source said the two sides are not in further discussion over a tie-up.

Brown-Forman’s stock price rose on Monday from Friday’s closing of $53.65 per share to Tuesday’s high of $60 before settling back at $54.31 at closing.

Constellation Brands, also an American alcohol beverage firm has interests in beer, wines and spirits, and is known for such brands as Modelo and Corona beers, as well as Robert Mondavi wine and Svedka vodka among others.

Brown-Forman, though a public company, is majorly controlled by the fifth generation of the Brown’s, the company’s founder, who hold 67.4% of the firm’s shares.

The maker of Jack Daniel’s Tennessee whiskey has seen its revenue and profits slide in the last three quarters, held back by foreign exchange headwinds and lost revenue from the sale of two brands – Southern Comfort and Tuaca in January 2016.

Brown-Forman is reported to be worth $22.24bn, while Constellation Brands is valued at $35.53bn.

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