Brown-Forman Buys BenRiach, Re-Enters Single Malt Space

In line with its endeavors to strengthen its whisky portfolio, Brown-Forman Corporation BF.B concluded its previously announced buyout of The BenRiach Distillery Company Limited, for a price of £281 million.

This acquisition, which was first announced in Apr 2016, has added superior Single Malt Scotch Whisky names, including The GlenDronach, BenRiach and Glenglassaugh, to Brown-Forman’s kitty. In fact, this buyout has also solidified Brown-Forman’s position with brand trademarks, a bottling plant, three malt distilleries, and the Scottish headquarters of the acquired company.

The 190-year old GlenDronach is most renowned for its richly sherried whiskies, while BenRiach, which commenced malt whisky production more than a century ago, is popular for making whisky from both non-peated and peated malted barley. Further, Glenglassaugh manufactures coastal Highland malt, thanks to its coastal region presence dating back 141 years.

With this deal, Brown-Forman has therefore made its presence prominent in the Single Malt Scotch Whisky segment yet again. Prior to this, the company held a minor stake in Glenmorangie plc, as part of which it marketed the latter’s Single Malt brand in Canada, the U.S., Continental Europe and various markets in Asia for a considerable period of time. However, Brown-Forman sold its stake, when Glenmorangie was divested to Moet Hennessy in 2005.

This re-entry in the premium class whisky world is likely to enhance Brown-Forman’s performance. In fact, the company has been firing on all cylinders to solidify its whisky portfolio, given the persistent strength noted in its sales.

Evidently, Brown-Forman announced the launch of premium whisky – Coopers’ Craft in Apr 2016, which marked its first new bourbon brand in almost two decades. Bottled at 82.2 proof, Coopers’ Craft will be found on Brown-Forman’s racks this summer onward, in certain U.S. regions initially. These include Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, South Carolina and Tennessee.

Brown-Forman, carrying a Zacks Rank #2 (Buy), is a major producer and distributor of premium alcoholic beverages in the world, and commands a strong portfolio of globally recognized brands. The company has been keen on enhancing its growth and value creation prospects over the last decade via active portfolio management strategies that include developing, acquiring and divesting specific brands and categories.

Other Stocks to Consider

Other stocks worth considering in the beverages-alcohol industry include Compania Cervecerias Unidas S.A. (NYSE:CCU) and Molson Coors Brewing Company (NYSE:TAP) , each with a Zacks Rank #1 (Strong Buy), and Constellation Brands Inc. (NYSE:STZ) , with a Zacks Rank #2.

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