Brown-Forman to acquire tequila Herradura and El Jimador.

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.

“In Herradura and El Jimador, we are acquiring two strong brands competing at the super-premium and premium levels in the world’s largest tequila markets – the U.S. and Mexico,” said Brown-Forman Chief Executive Officer Paul C. Varga. “While Brown-Forman has had a variety of interests in Mexico for many years, the acquisition of Casa Herradura is our most significant investment in the country and will enable us to continue our company’s international expansion.

“These brands will also help us advance our business within the growing Hispanic population of the U.S. and increase our participation in the exciting U.S. cocktail culture, as the tequila-based margarita is the most called-for drink in this country,” stated Varga.