Brown-Forman and Pernod Ricard $15 Billion Merger Talks Collapse Over Governance and Control

Brown-Forman and Pernod Ricard’s $15 billion deal talks fell apart not over price but over control. The two families behind the liquor giants could not agree on how much of the combined company each would control, Semafor reported. The Brown family wields about 80% of Brown-Forman’s voting power.

The Ricard heirs control about 21% of Pernod Ricard, whose controlling shareholder is the Ricard family. Brown-Forman is the slightly smaller of the two companies. Yet the Brown family wanted an ownership stake in the combined company that would have been larger than the Ricard family’s stake, Semafor reported.

Pernod Ricard’s offer was billed as a merger of equals. The structure gave rise to thorny issues that the two sides could not resolve. Brown-Forman and Pernod Ricard were not far apart on price, according to people close to both companies.

The talks collapsed over family control rather than valuation. The Ricard family remains open to reengaging with Brown-Forman if the Brown family is willing to open discussions on control, one of the people briefed on the conversations told Semafor.

Heirs of the Kentucky whiskey empire, the smaller of the two companies, wanted more control over the combined company, people familiar with the matter said.

Brown-Forman is still in discussions with Sazerac. Sazerac is controlled by the New Orleans-based Goldring family. Representatives for Brown-Forman and Pernod Ricard declined to comment.