Brown-Forman's stock soared on deal talks. Its valuation had tumbled to financial-crisis levels.

By Tomi Kilgore

The Jack Daniel's parent is in talks with Paris-based spirits giant Pernod Ricard

Shares of Brown-Forman surged Thursday, after Bloomberg reported that Pernod Ricard was looking into a potential acquisition of the Jack Daniel's whiskey parent.

Shares of Brown-Forman were having their best day in a year on Thursday, as the struggling parent of Jack Daniel's whiskey got caught up in merger speculation.

The company (BF.B), which also sells Herradura tequila, Chambord liqueur and Fords Gin, is being looked at by Paris-based spirits giant Pernod Ricard (PRNDY) (FR:RI) as a potential acquisition candidate, Bloomberg reported, citing people familiar with the matter. Pernod Ricard's brands include Absolut vodka, Beefeater gin and Chivas Regal whiskey.

Both companies subsequently confirmed the talks, and said any deal would be structured as a merger of equals. "Synergies from the contemplated combination are expected to be significant, creating a global spirits leader with enhanced scale, a powerful brand portfolio, and a balanced geographic footprint, all anchored by two iconic families," said the Louisville company.

Brown-Forman has been hurting in the post-COVID era, amid growing concerns that the decline in alcohol sales is a secular change in behavior, as younger generations flock toward health-and-wellness, as well as cheaper, alternatives. Although the company's latest earnings report released in early March provided some signs that a recovery may be in the works, the stock continued to fall.

Through Wednesday, the stock had lost 9.9% so far this year, after tumbling 67.2% amid a five-year losing streak through the end of 2025. In the past week, the stock had closed at the lowest price since June 2012.

But on Thursday, the stock shot up 9.6% to close at $25.74, enough to pace the S&P 500 index's SPX gainers. That was its biggest one-day gain since it ran up 10.1% on March 5, 2025.

Meanwhile, Pernod Ricard's U.S.-listed shares fell 7% on Thursday.

Brown-Forman's market capitalization was $11.81 billion at Thursday's close, while Pernod Ricard's market cap was $17.23 billion, according to FactSet data.

After such a steep selloff in Brown-Forman's stock, there is reason to believe it has become attractive to a suitor.

As the above chart shows, the stock's price-to-earnings ratio, based on earnings expectations for the next 12 months compiled by FactSet, has fallen to levels not seen since the 2008-'09 financial crisis.

And valuations have become relatively cheap, especially since CEO Lawson Whiting told analysts in early March that market conditions have remained "largely unchanged" for the past several quarters.

"In the current operating environment, which has been challenging and uncertain for some time now, I consider this to be positive," Whiting said, according to a FactSet transcript.

-Tomi Kilgore

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03-27-26 0409ET