Global spirits giant Pernod Ricard and American whiskey producer Brown-Forman, best known for Jack Daniel’s, have confirmed they are in discussions over a potential merger. The move would combine the world’s second-largest spirits company with a leading U.S. whiskey maker, as both firms navigate a prolonged slowdown in alcohol sales. While Brown-Forman’s shares rose sharply following the news, Pernod Ricard’s stock declined, reflecting mixed investor sentiment about the deal.

The spirits industry has been facing declining demand due to changing consumer habits, rising health consciousness, and pricing pressures from tariffs. Both companies have already initiated restructuring efforts, including cost-cutting measures and job reductions. Analysts note that a merger could deliver operational efficiencies and cost savings, especially given overlapping markets in the U.S. and Europe, though it may not fully address long-term growth challenges.

The proposed deal is expected to include a significant stock component, allowing founding families to retain influence in the combined entity. While Brown-Forman’s controlling shareholders have historically resisted such moves, current market conditions may make them more open to consolidation. The companies stated they will not provide further updates until negotiations are finalized or discontinued.

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