Spirit group Pernod Ricard says it has offloaded its Wild Turkey branded bourbon operations to rival Gruppo Campari as part of a billion dollar strategy to offset debt through refinancing plans.
Under a definitive agreement signed this week, Pernod Ricard will receive $575m (€434m) from the sale, which will see the Wild Turkey brands, American Honey liqueur, and the related distillery operations go the other way.
The sale marks the latest in a number of brand disposals made by the group to raise €1bn through a rights issue announced last July. With a total of €577m raised so far, the group said it hoped to meet its fund raising targets within the next twelve months.
The company said the rights issue would help bring balance to bottom line growth through debt reduction. To better meet its targets, along with selling the Wild Turkey brand, the company says it has also divested labels including Glendronach, Cruzan and Bisquit.
This amounts to 60 per cent of funding the group is seeking through offsetting non strategic assets under a plan announced last July.
After spending billions of dollars last year on acquiring the operations of Sweden-based V&S, which is notable for owning the Absolut vodka brand, Pernod Ricard said the €1bn rights issue would help meet its ambitions set out to refinance its operations up to 2013.
In announcing the V&S deal last year, Pernod Ricard said it expected to become joint leader of the global spirits market, holding an estimated 27 per cent, which amounts to sales volumes of 91m cases of wine and spirits.
Following the divestment, the company said that it had also readjusted its organic profit goals for the 2008 to 2009 fiscal year to between three and five percent on organic terms. Previous expectations by the group suggested it was looking to undergo growth of five to eight per cent for the period.