Pierre Pringuet, the deputy chairman and joint chief executive of Pernod Ricard, has piqued the attention of the drinks industry by declaring that the French firm might spend "a few billion euros" if a potentially profitable acquisition came into sight.
Speaking in London, Pringuet stated:
"Our net debt ratio is 3.6. We have confirmed on several occasions that we want to retain our investment grade rating in the US. We could go above four times net debt to Editda and possibly for a short time above five times, but certainly not six times, which was the case after the Seagram takeover (in 2000), after Allied Domecq in (2005) and after Absolut."
This would intimate that a gargantuan deal such as the $16 billion takeover of Beam effected by Suntory would be unlikely.
"It [a takeover] would depend on the combined Ebitda of Pernod Ricard plus the target company, plus the benefit of the synergies, so it is difficult to give a precise number. But we are talking of billions of euro . . . maybe not €10 billion for sure . . . but a few billion. That is what we could spend if we wished to,' Pringuet commented.
