Brown-Forman to acquire 3 single malt Scotch brands

AP News
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Posted: Apr 27, 2016 10:06 AM

LOUISVILLE, Ky. (AP) — Brown-Forman Corp., the producer of Jack Daniel's Tennessee Whiskey, announced plans Wednesday to re-enter the single malt Scotch whisky market with an agreement to purchase The BenRiach Distillery Co. of Scotland along with three brands.

The deal is valued at about 285 million pounds, or $416 million based on current exchange rates, the Louisville-based company said. As part of the deal, Brown-Forman said it will add The GlenDronach, BenRiach and Glenglassaugh single malt Scotch whisky brands to its portfolio.

The brands have combined yearly sales of about 75,000 cases. Their biggest markets are in the U.S., United Kingdom, Taiwan and Germany, Brown-Forman spokesman Phil Lynch said.

The purchase includes three malt distilleries, a bottling plant and the company's headquarters in Edinburgh, Scotland. The oldest of the distilleries was founded in 1826.

"The acquisition of these super premium brands will allow Brown-Forman to re-enter one of our industry's most exciting and consistent growth segments," company CEO Paul Varga said.

Varga said the single malt brands being acquired "are rich in history, and we believe they will continue to prosper and grow in our hands."

Billy Walker, managing director of The BenRiach Distillery Co., predicted that Brown-Forman will take the brands "to the next level and fulfill their full potential." He said he's confident the Kentucky company will "prove to be worthy custodians of these historic distilleries."

The BenRiach Distillery Co., with a workforce of 165 that includes seasonal workers, will operate as a Brown-Forman subsidiary. The transaction is expected to close on or about June 1.

Brown-Forman, a big player in the American whiskey category, has had limited stakes in the single malt Scotch whisky market. The company had a previous minority shareholder stake in Glenmorangie and marketed the Glenmorangie Single Malt Whisky brand in the U.S. and Canada from 1992 to 2005 and in some European and Asian markets from 2000 to 2005.

Brown-Forman sold its interest as part of Glenmorangie plc's sale to Moet Hennessy in 2005.

The GlenDronach Distillery, located in the hills of the Scottish Highlands, was founded in 1826. The Glenglassaugh Distillery, founded in 1875, is located on the coast in the northern Scottish Highlands. The BenRiach Distillery began making malt whisky in 1898.

Along with its flagship Jack Daniel's brand, Brown-Forman's spirits lineup includes Finlandia, Korbel, el Jimador, Woodford Reserve, Canadian Mist, Herradura, Early Times and Old Forester.

Earlier this year, Brown-Forman sold its Southern Comfort and Tuaca brands to Louisiana-based Sazerac in a $543.5 million deal.