We received a very strong response to our latest poll question, which asked if Pernod Ricard paid too much for Vin & Sprit this month. Pernod agreed to shell out 5.6 billion euros (nearly $9 billion) to purchase 100 percent of the shares of Vin & Sprit, whose brands include the fast-growing Cruzan Rum, and its crown jewel, Absolut Vodka. A bit more than half of all the respondents said yes, Pernod absolutely did pay too much. It paid roughly 20 percent above top-end estimates made by securities analysts, and the company will nearly double its debt load, as it plans to finance the deal almost entirely with debt.
However, approximately 28 percent were a bit more hopeful. They agreed that the purchase price could be worth it, if the new owners develop a significant way to market the brand. Crafting an outstanding marketing strategy that could compete in today’s very crowded vodka market – where new entrants are being launched almost weekly – could give Pernod a substantial payoff, they reasoned.
Another group could not say for sure at this time if Pernod overpaid, but they agreed that time will tell. Just over 15 percent of respondents felt it would take months, if not years, to determine if the spirit company’s payout was worth it. And finally, roughly 6 percent of respondents were quite bullish on the amount paid out for Absolut. This segment agreed that the Swedish vodka, the second best-selling imported vodka in the U.S. and a leader on the global vodka scene with a well established brand with its memorable (and lately, controversial) advertising campaign – is well worth the purchase price. Check out our current poll, at BevInfoGroup.com.