Brown-Forman to acquire leading tequila business


Press Release – 08/28/2006

August 28, 2006, Louisville, KY – Brown-Forman Corporation announced today that it has reached agreement with Pablo Romo de la Peña and Jose Guillermo Romo de la Peña, owners of Grupo Industrial Herradura, S.A. de C.V. (Casa Herradura), to purchase substantially all of their 136-year-old company's related assets for $876 million dollars.

Under terms of the agreement, Brown-Forman will acquire Herradura and El Jimador tequilas and the New Mix tequila-based ready-to-drink brand. Other important assets included in the purchase are tequila production facilities and a sales and distribution organization in Mexico, which operates across all major channels of business. Casa Herradura, with approximately 1,100 employees, reported net sales during calendar year 2005 of approximately $200 million, while generating operating margins comparable to Brown-Forman's.

Lehman Brothers acted as financial advisor to Brown-Forman Corporation in this transaction. Wachtell Lipton Rosen & Katz and Creel García-Cuéllar y Müggenburg provided legal counsel to Brown-Forman Corporation. Merrill Lynch Pierce Fenner & Smith acted as financial advisor for Casa Herradura and Juan Jaime Petersen Farah, Eduardo Fernandez Agraz, and Michel Dyens & Co. LLC acted as advisors to the board. Jones Day and Caraza y Morayta, S.C. provided legal counsel for Casa Herradura. Guillermo Romo Romero acted on behalf of his father, Jose Guillermo Romo de la Peña.

Michel Dyens