Two of the biggest players in the Scotch whisky industry are holding talks over a blockbuster merger.
Paris-based Pernod Ricard, owner of Chivas Brothers, and Brown-Forman, the US spirits giant behind Jack Daniel's and several respected single malt Scotch whisky brands, are engaged in discussions over a partnership “akin to a merger of equals”.
The deal, which would likely mark the biggest consolidation in the Scotch whisky industry since Suntory's £10 billion acquisition of Beam in 2014, would unite a host of renowned brands and distilleries under a single roof. It would also create a powerful bourbon portfolio, bringing Brown-Forman's Jack Daniel's, Old Forester, and Woodford Reserve together with Pernod Ricard's Rabbit Hole and Jefferson's Bourbon.
Pernod’s Chivas Brothers stable includes heavyweight international blended Scotch whiskies Chivas Regal, Ballantine’s, and Royal Salute, in addition to single malt brands The Glenlivet, Aberlour, and Scapa. Brown-Forman established a major presence in the industry with its £285 million acquisition of The BenRiach Distillery Company from Billy Walker and fellow investors in 2016. That deal saw Kentucky-based Brown-Forman acquire The Glendronach, BenRiach, and Glenglassaugh single malt brands and distilleries as well as a bottling plant and headquarters in Edinburgh. BenRiach had a headcount of 165 employees at the time.
The prospective merger between Pernod Ricard and Brown-Forman has been mooted against a backdrop of turmoil in the Scotch whisky industry, which has come under pressure from a host of global economic and geopolitical headwinds and a sharp downturn in demand in the key markets such of US and China.
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In its most recent update on trading in February, Pernod Ricard, which has owned Chivas Brothers since 2001, highlighted “soft” market conditions in the US and weak consumer confidence in China as sales fell by 5.9% to €5.253 billion in the six months to the end of December. It declared that the market backdrop “remains volatile and uncertain”.
The Pernod results were followed shortly by an update from Scotch whisky rival Diageo, which warned that its full-year sales would come in below expectations amid ongoing challenges in the US and China. Diageo, which slashed its dividend in half, cited the impact of US tariffs and fragile consumer confidence in key markets as it reported a 1.2% fall in operating profit to $3.116 billion for the six months ended December 31, with net sales down by 2.8% to $10.46bn.
Figures released by the Scotch Whisky Association in February underlined the impact of the 10% baseline tariff imposed by President Donald Trump in April last year. The import tariff contributed to a 9.2% fall in export volumes of Scotch whisky to the US, the industry’s most lucrative overseas market, to the equivalent of 120 million 70cl bottles in 2025. However, the value of exports to the US fell less sharply, declining by 4% to £933m over the course of 2025.
Analysts quoted by Reuters questioned whether the powerful families that dominate Pernod Ricard and Brown-Forman, which include members from multiple generations, would be able to successfully combine. The two companies confirmed talks have taken place but said there is no "assurance" that a deal can be done.
Russ Mould, investment director at AJ Bell, said: “Consolidation is an inevitable consequence of what has been a difficult time for an industry facing diminishing demand. In the west, household budgets are under pressure and people are drinking less for health and lifestyle reasons.
“The once-reliable growth to be found from a growing middle class in emerging markets is ebbing away like spilt liquor, particularly in China, and tariffs have had a big impact on costs and supply chains. This has put pressure on the share prices of both companies and created the conditions where a merger looks like an attractive option, with greater scale seen as a potential route to navigating a less than helpful backdrop.
“There’s no guarantee that talks will result in a deal and with any combination of this size, there are always substantive integration risks.”
Pernod Ricard, which employs several hundred people at its large bottling and warehousing operation at Kilmalid, Dumbarton, said: “Following recent speculation in the press, Pernod Ricard confirms that it is in discussions regarding a potential business combination with Brown-Forman. If agreed and subject to customary approvals, this partnership would be akin to a merger of equals, drawing from the talent and expertise of both companies, and creating value for shareholders of both companies.
“The contemplated combination would create a global spirits leader with enhanced scale, a powerful brand portfolio, and a balanced geographic footprint, all anchored by two iconic families. Operational synergies would be significant, leveraging Brown-Forman's iconic brands, including Jack Daniel's, and Pernod Ricard’s global distribution strength and exposure to highest growth potential markets.
“There can be no assurance that any agreement will be reached. Pernod Ricard does not intend to further communicate until an agreement is reached or discussions are terminated."
Brown-Forman said: “We note the recent market rumours regarding a potential business combination involving Brown‑Forman and Pernod Ricard. Brown‑Forman regularly explores and evaluates strategic opportunities, and can confirm it is engaged in discussions with Pernod Ricard.”
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