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|Brown-Forman Completes Casa Herradura Acquisition for $776 Million|
LOUISVILLE, Ky.--(BUSINESS WIRE)--Jan. 18, 2007--Brown-Forman Corporation (NYSE: BFA) (NYSE: BFB) and Grupo Industrial Herradura, S.A. de C.V. (Casa Herradura), announced today that Brown-Forman has completed its previously announced acquisition of substantially all of the assets of the Mexican tequila company for $776 million. The purchase price was originally agreed to be $876 million, but was subsequently amended by mutual agreement of the parties. The final price is subject to customary post-closing working capital adjustments.
"We are very excited about this acquisition which gives us two strong brands competing at the super-premium and premium levels in the world's largest tequila markets - the U.S. and Mexico," said Brown-Forman Chief Executive Officer Paul C. Varga. "We believe Herradura, with its rich heritage, is a jewel in the Mexican tequila category. We expect these brands will help us advance our entire business within the growing Hispanic population of the U.S., and that the Casa Herradura infrastructure in Mexico gives Brown-Forman a strong business platform in yet another important international market," stated Varga.
Brown-Forman expects that the earnings dilution as a result of this acquisition will be $0.14 to $0.18 cents per share for Fiscal 2007, which ends on April 30, 2007. This increase over the earlier estimate of $0.08 to $0.12 cents is the result of expected lower profitability of the business in Mexico; higher upfront transition costs, including the purchase of U.S. distributor inventory; and the effect of amortizing the buy-out of U.S. distribution rights for the Tequila Herradura brand over the next five years. These higher costs are anticipated to be partially offset by lower interest expense.
Brown-Forman Corporation is a diversified producer and marketer of fine quality consumer products, including Jack Daniel's, Southern Comfort, Finlandia Vodka, Canadian Mist, Fetzer and Bolla Wines, Korbel California Champagnes, and Hartmann Luggage.
Important Note on Forward-Looking Statements:
This release contains statements, estimates, or projections that constitute "forward-looking statements" as defined under U.S. federal securities laws. Generally, the words "expect," "believe," "intend," "estimate," "will," "anticipate," and "project," and similar expressions identify a forward-looking statement, which speaks only as of the date the statement is made. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. We believe that the expectations and assumptions with respect to our forward-looking statements are reasonable. But by their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that in some cases are out of our control. These factors could cause our actual results to differ materially from Brown-Forman's historical experience or our present expectations or projections. Here is a non-exclusive list of such risks and uncertainties:
CONTACT: Brown-Forman Corporation Phil Lynch, 502-774-7928 Vice President Director Corporate Communications and Public Relations or T.J. Graven, 502-774-7442 Assistant Vice President Director Investor Relations SOURCE: Brown-Forman Corporation