Ninety-nine problems, but Bacardi ain’t one of them now.
A year-long legal dispute between rapper and business tycoon Shawn “Jay-Z” Carter and Bacardi was finally resolved on Friday when the spirits giant announced it has agreed to acquire the majority of Cognac venture D’ussé, with Carter retaining a significant ownership stake through his company SCLiquor.
Terms of the deal were not disclosed, but with Carter’s lawyers tagging D’ussé with a $3 billion valuation throughout the dispute, and Bacardi now owning at least 75.01% of the business, the rapper may have walked away with at least $750 million. Carter stated in a press release that he was “excited to renew this partnership with Bacardi.”
The story goes back to 2012, when Carter and Bacardi partnered to launch D’Ussé Cognac with the aim of shaking up a traditional category bossed by two dominant players, Hennessy and Rémy Martin.
The legal troubles began in October 2021, when the rapper and entrepreneur looked for a buyout over concerns that the Bacardi subsidiary overseeing D’Ussé’s day-to-day operations was mismanaging the brand by not adequately preparing for a surge in demand.
Carter initially attempted to exit the partnership by requesting Bacardi buy out his 50% stake for $2.5 billion; the spirits company responded with a nearly $500 million valuation for the same shares. Bacardi subsequently rejected Carter’s counter offer of $1.5 billion for its own stake. That kicked off months of arbitration and litigation in multiple states focused mostly on the valuation of the cognac brand.
After Bacardi won several early rounds of arbitration, Carter took the case to court in challenging the arbitration panel with claims that one member was a racist, while alleging another held a personal grudge against him. SCLiquor also claimed that Bacardi was intentionally running D’Usse into the ground to manipulate its valuation and drive down the value of its stake. The “Reasonable Doubt” rapper had also threatened to bring the fight overseas to the spirit giant’s headquarters in Bermuda. The resolution serves as settlement to all of the pending lawsuits.
Carter, a noted investor and entrepreneur in addition to his music career, has history in the alcohol business, having acquired U.S. distribution rights in 2002 for Scottish vodka maker Armadale in his role as co-founder of Roc-A-Fella Records. He also hasn’t been afraid to mix things up with industry leaders when he feels provoked. In 2006, the CEO of Louis Roderer Champagne made remarks that slighted the hip hop stars who helped make the company’s champagne, Cristal, a household name. Carter called for a boycott and shortly after gave a boost to champagne Armand de Brignac in a music video and bought 50% stake of the brand. In 2014, he bought out all other investors and in 2021 Moët Hennessy Louis Vuitton bought half the brand.