Pernod-Ricard is in talks to acquire Brown-Forman. Pernod has a market value of around $17 billion, while Brown-Forman has a market value of around $12 billion. There's no guarantee there will be a deal, they added.

When the possible transaction was disclosed by Blkoomberg, Brown-Forman's shares jumped 10% and Pernod's slid 6%. Whether the deal takes place will largely depend on the Brown family, descendants of foundeer George Garvin Brown, which controls more than 50% of the economic interests and 67% to 70% of the voting shares of Brown-Forman Corp.

The move by the family-controlled companies would be a response to the global spirits slump. The companies said a merger would result in "significant" operational synergies, although exactly how that would work wasn't explained.

And it certainly isn't clear that a merger would solve their challenges. To be sure, the combined entity could have one general counsel instead of two in each country, one chief financial officer, one global chief marketing officer, etc.

But the two companies' issues aren't back-office concerns. They are, rather, sales issues, in particular a secular decline in the market for distilled spirits and other alcoholic beverages.

There is no evidence that combining two companies solves these sort of problems. Look at Diageo: Sir Ivan Menezes led the company through a period of serene growth. The challenges while he acquired some major brands such as Casamigos, Don Julio, Aviation Gin and Don Papa Rum, Menezes focused on premiumization. Selling a shrinking number of cases at ever-higher prices.

Shortly after he died in 2023, the bev/al business went into a slump and despite dumping Menezes' chief operating officer as CEO and replacing her with the company's lead independent director, it continues to struggle, at least in a relative sense. In the fiscal 2026 first half, Diageo reported a 4% decline net sales, a result of consumers trading down to lower priced brands, the development of GLP-1 drugs, neo-Prohibitionist propaganda and aging demographics.

Those are the same forces affecting all bev/al companies. The best we can say for merging two struggling companies (and compared to many companies, neither B-F nor Pernod is struggling) is that you get one, large struggling company.

Brown-Forman Class A stock closed up 5.63% at $27.19%, and in after-hours trading advanced to $27.56, up an addition 1.36%. Pernod Ricard closed at $64.70, up 7.94%.

Among other bev/al stocks we follow:

• Diageo ADRs closed down 3.8%. There didn't appear to be any particular reason for the decline, and Diageo's stock closed in London up 0.68%.
• Constellation Brands closed up 0.66%
• Davide Campari-Milano closed u 0.20%
• Remy Cointreau closed up 0.73%
• Molson Coors Beverage closed up 3.2%
• Boston Beer Co. closed down 1.7%