- Jose Cuervo, a more than two-hundred-year-old tequila brand, is preparing for an IPO, people familiar with the matter told The New York Times. The speculation follows a similar Bloomberg report last month.
- The stock's initial offering could raise about $750 million, but the company has yet to decide whether to list in the U.S., Britain, or Mexico, sources said.
- Jose Cuervo is working on preparations for the deal with JPMorgan Chase and Morgan Stanley, according to the sources. Bank representatives declined to comment to The New York Times, and the company did not immediately respond for comment.
Rumors of a stock listing for the tequila brand have been off and on since 2006, when Jose Cuervo CEO Juan Domingo Beckmann floated consideration of the idea. A potential sale of the brand to Diageo fell through in late 2012 after the two parties failed to agree on a mutually beneficial price (Jose Cuervo was then valued around $3 billion). Not long after, speculation of a Jose Cuervo IPO surfaced again. And more recently, the rumor mill churned this past October, with Beckmann saying that an IPO could come within the next 12 months, Bloomberg reported.
That Jose Cuervo could finally be pursuing an IPO after a decade of speculation demonstrates executives' confidence in the brand and the tequila market today. Tequila was among the fastest-growing spirits categories in the U.S. in 2015 with 9.4% sales growth, driven by double-digit growth in the high-end premium and super premium segments, DISCUS found. The global tequila market is expected to exceed $9 billion by 2019 with a CAGR of over 3%, according to a recent Technavio report.
A cash infusion from a successful IPO could enable Jose Cuervo to produce more high-end premium and super premium varieties to capitalize on consumers' increased demand for premium spirits, particularly in the tequila category.