Brown-Forman, the company behind Jack Daniel’s whiskey, Woodford Reserve bourbon and Finlandia vodka, has announced that it is selling off its Southern comfort brand, as well as Tuaca tequila.
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”. This is assumed by most observers to be the whiskey and vodka businesses.
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 Southern Comfort since 1979 and Tuaca since 2002. It is selling the brands to Sazerac, one of New Orleans’ oldest family-owned, privately held companies, which owns or distributes brands such as Old Pulteney and Glenfarclas Scotch whiskies, Royal Canadian, Skol vodka and Black Watch brandy.
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 deal, which will need the OK from US regulators, will be discussed in further detail during Brown-Forman’s March conference call following the publication of its third-quarter earnings report.