PARIS, April 17 (Reuters) - Pernod Ricard, which is being targeted by activist investor Elliott, plans to buy super premium Italian gin brand Malfy from Biggar & Leith, as it further strengthens its fast-growing portfolio of so-called ‘craft’ spirits.
Pernod’s latest takeover comes as the company, which is the world’s second-largest spirits group behind Diageo, faces pressure from U.S. hedge fund Elliott Management to improve profit margins and corporate governance.
The financial terms of the deal, which was announced by Pernod on Wednesday, were not disclosed. Pernod said the transaction was expected to close shortly.
Malfy is a range of super-premium flavoured gin distilled by the Vergnano family in the Italian region of Moncalieri in Piedmont, and sold in the United States, Britain and Germany.
Each Malfy range is distilled using genuine Italian ingredients such as Italian Juniper, coastal grown Italian lemons and Sicilian blood oranges and pink grapefruits.
Malfy’s production stands at around 100,000 cases of gin bottles each year.
“This acquisition is true to our long-standing strategy of investing in brands with strong potential in growing categories,” said Christian Porta, the head of Global Business Development at Pernod Ricard.
“In line with the launch of our “transform and Accelerate” strategic plan, we will continue actively managing our fantastic portfolio of brands,” added Porta.
Since Chairman and CEO Alexandre Ricard took over in 2015, Pernod has favoured expanding in the fast-growing premium craft spirits sector, which features brands such as German gin maker Monkey 47, Canadian craft gin Ungava, Del Maguey mezcal or Smooth Ambler Spirits, the maker of Old Scout bourbon and Greenbier gin.
Meanwhile, Pernod Ricard has sold products it did not see as having a strategic value for it, such as the Domecq brandy and sherry business, and more recently Graffigna Argentine wines. (Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)