Weeks after Pernod Ricard and Brown-Forman confirmed that they are in merger talks, Sazerac is now reportedly eyeing a deal with the Jack Daniel’s maker, according to the Wall Street Journal. The report shares that Sazerac has approached Brown-Forman, according to unnamed people familiar with the matter. This news arrives as Wall Street analysts’ opinions have been split on whether a deal takes shape between Pernod-Ricard and Brown-Forman, given the Brown family’s past reticence to entertain suitors. The two companies previously said there can be no assurance that any agreement will be reached, and that they will not comment until an agreement has been finalized. As for a Brown-Sazerac deal, anti-trust issues could pose a concern, given that the combination would constitute an 18% share of the U.S. market and nearly 40% of American whiskey, according to analysts at TD Cowen. A merger between Brown-Forman and either the second-largest global spirits and wine supplier or another whiskey giant could create more barriers to capital and markets for independent suppliers. - The merger talks come on the heels of distributor acquisitions that have created further consolidation in the wholesaler tier – a route-to-market bottleneck that has plagued smaller suppliers for years.
- The merged group could command much more wholesaler attention, better shelf space, stronger promotional support and better access to key retail customers – but that could come at the expense of smaller suppliers.
The domino effect of dealmaking could also leave a dearth of acquirers, and fewer buyers means less competitive bidding on independent brands looking for an exit. Get the full breakdown on the impacts of a major merger on BevNET. | 
