Investors flock to buy a piece of Mexico’s José Cuervo
According to The Economist, investors are rushing to buy a piece of Mexico’s leading tequila-maker, José Cuervo.
Over the course of more than 200 years in the tequila business, Jose Cuervo will have been responsible for a fair few moments of giddy pleasure. Last week, it got one of its own thanks to a successful initial public offering (IPO). It was eight times oversubscribed and raised 18.6 billion pesos ($920 million USD) in exchange for 15% of the company.
Jose Cuervo, which is based in the western Mexican state of Jalisco, is one of the country’s best-known brands, and has been run by the same family for 11 generations. It dominates the Mexican tequila industry; sales in 2015 came to 18.5 billion pesos (910 million USD). It also holds an assured place in the history of mixology: the original margarita cocktails were purportedly made with Jose Cuervo tequila.
Long considered a candidate for flotation, it eventually published a prospectus in September 2016. The IPO was delayed, though, seemingly to allow the company to take stock of the impact of Donald Trump’s election victory in November. Since then the peso has dropped over 10% against the dollar, and Mr Trump’s desire to rework, even to rip up, the North American Free-Trade Agreement, and perhaps impose a border tax on Mexican exports to America has sent tremors through the Mexican economy.