UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 19,
2007 (January 18, 2007)
(Exact name of registrant as specified in its charter)
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| Delaware
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002-26821
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61-0243150 |
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| (State or other
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(Commission
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(I.R.S. Employer |
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File Number)
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Identification No.) |
| of incorporation) |
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| 850 Dixie Highway, Louisville, Kentucky
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40210 |
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| (Address of principal executive offices)
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(Zip Code) |
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Registrant’s telephone number, including area code:
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(502) 585-1100 |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
ITEM 1.01. ENTRY INTO MATERIAL DEFINITIVE AGREEMENT
On January 18, 2007, Brown-Forman Corporation (“Brown-Forman”) entered into the Third Amendment
(the “Third Amendment”) to the Asset Purchase Agreement dated as of August 25, 2006 among Jose
Guillermo Romo de la Peña, Luis Pedro Pablo Romo de la Peña, Grupo Industrial Herradura, S.A. de
C.V. (“Grupo Industrial Herradura”), certain of their respective affiliates, Brown-Forman and
Brown-Forman Tequila Mexico, S. de R.L. de C.V., a subsidiary of Brown-Forman (the “Purchase
Agreement”). The amendment reduced the Initial Purchase Price, as defined in the Purchase
Agreement, from $876,000,000 to $776,000,000. The foregoing description of the Third Amendment
does not purport to be complete and is qualified in its entirety by reference to the text of such
agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
On
January 18, 2007, Brown-Forman completed the acquisition of
substantially all of the assets of Grupo Industrial Herradura. Pursuant to the Purchase Agreement,
Brown-Forman acquired substantially all of the assets of Grupo Industrial Herradura and its affiliates relating
to its tequila business, including the Herradura and el Jimador tequilas, the New-Mix tequila-based
ready to drink brand, the trade names and trademarks associated with such brands and other acquired
brands, as well as related production facilities and sales and distribution organization in Mexico.
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consideration paid to the sellers at closing was approximately $778,000,000 in cash and the assumption of
certain liabilities. The cash consideration reflected contractually
agreed-to deductions from the Initial Purchase Price for certain
receivables not purchased and a $10,000,000 holdback to be paid to
the sellers subject to customary post-closing working capital
adjustments and payment by Brown-Forman of certain taxes payable in
connection with the transaction. Of the cash amount paid at closing, $22,000,000 was placed into escrow, which amount
will be released to the sellers in the future subject to the absence or satisfaction of any claims
for indemnification made by Brown-Forman.
The
description of the Purchase Agreement contained in this Current
Report on Form 8-K is qualified entirely by reference to the text of
the Purchase Agreement, which is incorporated by reference herein
from Exhibit 2.1 of Brown-Forman’s Current Report on Form 8-K
filed with the Securities and Exchange Commission on August 29, 2006
and Item 1.01 above.
ITEM 7.01 REGULATION FD DISCLOSURE
On January 18, 2007, Brown-Forman issued a press release announcing the closing of its acquisition
of Grupo Industrial Herradura and the reduction of the Initial Purchase Price from $876,000,000 to
$776,000,000. This reduction was negotiated in light of some business
softness in Mexico in 2006, primarily in the second half, and
additional business information from Grupo Industrial
Herradura.
In its announcement of the closing of the acquisition, Brown-Forman stated that it expects that the
earnings dilution as a result of this acquisition will be $0.14 to $0.18 per share for Fiscal
2007, which ends on April 30, 2007. This increase over the earlier estimate of $0.08 to $0.12
is the result of expected lower profitability of the business in Mexico; higher upfront
transition costs, including the purchase of U.S. distributor inventory; and the effect of
amortizing the buy-out of U.S. distribution rights for the Tequila Herradura brand over the next
five years. These higher costs are anticipated to be partially offset by lower interest expense.
A copy of the press release is furnished herewith as Exhibit 10.2.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.