Cuervo suspends IPO until after election
Perhaps the thought of the US government building a wall between the US and Mexico was a deterrent, or it just isn’t ready to go public, but Jose Cuervo, the biggest tequila producer in the world, has suspended its initial public offering until after the US election in November.
The news, announced by Reuters on Wednesday, said that three unnamed people familiar with the issue, said concerns about market volatility around the election meant that Cuervo decided to postpone the IPO.
Markets have already been in flux in Mexico, where Becle, as the company is officially known, is based. The IPO was initially announced for the Mexican trading market last week, and the company also planned a private placement to investors in the US. The public offering was thought to potentially raise between $500m and $1bn for the liquor maker, which has been shifting its focus to higher-end 100 per cent agave brands. The funds would be used to help fund growth and broaden the Cuervo portfolio.
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Concerns over US dealings with Mexico should Donald Trump win the election, could make relations quite tense, especially since Trump has verbally berated Mexico and Mexican immigrants, has threatened to dismantle the North American Free Trade Agreement and has threatened to build a wall to keep Mexicans out of the country.
The Reuters story noted that Jose Cuervo made reference to the US election in its prospectus, noting that any renegotiation of trade deals after the vote could ultimately have a serious impact on business.