Brown-Forman to sell Southern Comfort

Brown-Forman has reached an agreement to sell its Southern Comfort and Tuaca trademarks to Sazerac for $544 million (£337m), the company has announced. 

Brown-Forman has will offload its Southern Comfort brand in a deal, including Tuaca, worth $544m (Photo: Brown-Forman)

In a company statement, Brown-Forman CEO Paul Varga said the decision to sell the brands reflected “the company’s evolving portfolio strategy and a continuation of its efforts to focus resources on its highest strategic priorities”.

Varga added: “We’re proud of the work undertaken over the years by our employees and partners on behalf of Southern Comfort and Tuaca. Both brands played important roles in the Brown-Forman success story, and we will have fond memories of the enjoyment they brought to consumers, our partners and to Brown-Forman.”

The US spirits giant has owned the Southern Comfort brand since 1979. The company fully acquired Tuaca in 2002.

Commenting on the newly agreed deal, Sazerac president and CEO Mark Brown said: “We are very excited about the opportunity to acquire such iconic brands. Brown-Forman has done an excellent job of building both brands over the years and we are looking forward to many more years of successful brand building.”

The sale is expected to be completed by March 1, 2016, Brown-Forman said, and would result in a one-time operating income gain of around $475m (£330m) in 2016.

The transaction, which is subject to regulatory clearance in the US, will be discussed in further detail during Brown-Forman’s March conference call following the publication of its third-quarter earnings report.

The drinks business revealed at the end of September 2015 that Brown-Forman intended to sell its Southern Comfort brand to focus on its core whiskey brands like Woodford Reserve, Old Forester, and Jack Daniel’s. 

The Southern Comfort brand alone was estimated at the time by market analysis firm Nomura to be worth around $700m (£460m), according to Reuters.

The Kentucky-based Brown-Forman Corporation is the owner of major spirits brands including Jack Daniel’s Finlandia, Korbel, Woodford Reserve, Canadian Mist, Herradura and Chambord. The 140-year-old company has around 4,400 employees and its brands are represented in 160 countries worldwide.  

Sazerac is one of New Orleans’ oldest family-owned, privately held companies, with operations in several states across the US.