Bacardi Close to Acquiring Ilegal Mezcal

Anonymous sources reported that Bacardi is in negotiations to acquire Ilegal Mezcal for close to US$200 million. The Cuban liquor manufacturer has owned a minor stake in Ilegal Mezcal since 2017.

Previously, the private firm L Catterton had held meetings with Ilegal Mezcal representatives with the intention to buy the company. However, according to anonymous sources, Bacardi, along with the firm VMG Partners, are existing investors in Ilegal Mezcal and therefore have preferential rights in its sale. 

In 2018, Bacardi bought the tequila company Patron for US$5.1 billion, after having owned a minority stake since 2008. As agave spirits increase in popularity, sector competitors including Davide Campari-Milano and Absolut Vodka distiller Pernod Ricard SA have started to acquire stake in mezcal brands. Analysts from Reuters pointed out that tequila sales, still largely confined to North America, are growing faster than the overall alcoholic drinks market as high-end brands help tequila shrug off its image as a party drink. 

In 2022, tequila and mezcal ranked second among agrifood products with the highest export value, reaching a total of US$3.63 billion, as reported by MBN. Most recently, tequila reached the Top 3 of most exported products with more than US$1.01 billion sold in the US, China and Europe markets in 1Q23. 

Currently, Ilegal Mezcal operates in the US. Its origins go back to 2004, when John Rexer began to export mezcal bottles from Oaxaca to supply his bar in Antigua, Guatemala. According to Ilegal Mezcal’s website, their distillates are handmade by fourth generation mezcaleros in the Santiago Matatlan Valley of Oaxaca, Mexico. The prices per bottle ranges from US$26 to US$98.