Sept. 28, 2005 — "The only change we are expecting to see is that we sell even more rum," said Marvin Pickering, chief financial officer for Cruzan Rum, after a sale of the company to the Absolut Spirits Co. Inc. was finalized Monday.
The plan for the sale of the controlling interest in Cruzan Rum was announced in June. Pickering said that as far as he knew, the sale to the wholly-owned subsidiary of V&S Vin & Spirit was executed "exactly" as planned.
According to a press release from Cruzan International's Florida office, Absolut Spirits purchased all 4,294,583 shares of Cruzan common stock owned by Angostura, currently representing approximately 63.6 percent of the company's outstanding common stock, for an aggregate consideration of $122 million, or $28.37 per share.
Kenny Chesney, the popular country singer with a multi-year contract promoting Cruzan Rum, had just been garnering more publicity as a newlywed when the proposed stock sale was announced. See Swede Deal Makes Cruzan Rum Stock Soar.
However, before the stock deal was consummated, he was getting his divorce. Pickering said, however, "From what we hear, he is still packing them into the concerts."
According to Pickering, Cruzan Rum has seen a steady growth in sales in recent years. The company is trying to negotiate a deal with the V.I. government where some of the new tax money generated by Cruzan Rum is given back to the company to use for advertising sales. However, the deal's status is unknown, as the governor has requested an investigation into it.
Sales figures as of the end of August show an 11 percent sales increase over last year, Pickering said. He projects the company will sell 7 million proof barrels this year, up from 6.3 million last year.
V&S Vin Spirit AB, an international wine and spirits company, is run by the government of Sweden. Since 2003, Cruzan has had a distribution agreement with V&S.
When the sale was announced, the closing date was predicted to be before Sept. 30. That news resulted in Cruzan Rum's stocks almost doubling in price.
The rum distillery started on St. Croix in 1760, exporting rum worldwide. However, it was not until after 1933 and the end of Prohibition that the distillery began running continuously. The Cruzan company changed its name in May from Todhunter International to reflect its flagship brand.
While it only produces 600,000 cases of the rum market's total of 19 million cases, Cruzan is the No. 4 selling premium rum, behind Bacardi, Captain Morgan and Malibu.
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