Pernod Ricard Not Looking For Large Acquisitions At Present

Pernod Ricard SA (RI.FR) isn't looking at making large acquisitions at present, the company's finance director said Tuesday.

The maker of Martell cognac, Havana Club rum and Mumm champagne is concentrating on further paying down debt, Gilles Bogaert told reporters at a briefing. The company's net debt stands at just over EUR9 billion.

He said the company is targeting a net debt to earnings before interest, taxes, depreciation and amortization ratio of close to 4 times by the end of June next year, down from 4.4 times at the end of its last fiscal year.

"Our priority is deleveraging," Bogaert said. "Massive acquisitions short term are not on the agenda, but we are open to tactical moves."

Pernod Ricard, which also produces Absolut vodka, Chivas Regal whisky and Malibu rum, has been linked to making a consolidation play for spirits assets owned by U.S.-based conglomerate Fortune Brands Inc. (FO), which includes Jim Beam bourbon. Fortune Brands is looking to spin off its home and security business next month.

Last week, Pernod Ricard said it was confident about its growth prospects after it posted a 10% increase in net profit for the year ended June 30, 2011, boosted by a focus on flagship brands.

The earnings uplift followed a solid performance last week from U.K.-based peer Diageo PLC (DGE.LN), producer of Johnnie Walker scotch, Guinness stout and Smirnoff vodka, which set ambitious targets for double-digit earnings growth in the medium term after recording a 17% rise in net income.

European spirit giants are benefiting from a global thirst for premium products, increased consumer confidence among the well-off in developed economies, robust exposure to emerging markets growth and reduced dependency on weather patterns, helping them boost earnings and sales.

-By Simon Zekaria, Dow Jones Newswires; [phone]; [e-mail]

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