Pernod Ricard Wins Auction for Vin & Sprit

Pernod Ricard Wins Auction for Vin & Sprit

Pernod Ricard Wins Auction for Vin & Sprit

 

Pernod Ricard SA has won an auction to acquire Sweden's Vin & Sprit AB, with the global drinks giant beating out Fortune Brands Inc. of the U.S. to become the owner of the prized Absolut vodka brand, people familiar with the matter said.

The details of the winning bid weren't immediately clear, but V&S, which is owned by the Swedish government, was expected to fetch as much as $7 billion. The results of the auction were set to be announced Monday morning, the people said, four days after final bids were due.

A spokesman for V&S declined to comment. Representatives for Fortune and Pernod also declined to comment.

Two other bidders -- Bacardi Ltd. and a group comprising Swedish investment firms EQT Partners AB and Investor AB -- also were vying for V&S, in an auction that began with a first round of bids in January.

Absolut is the world's third-largest premium liquor in terms of volume, after London-based DiageoPLC's Smirnoff vodka and Bacardi rum.

The V&S sale is being closely watched for signs that big deals still can get done after turmoil in the global financial markets caused a sharp slowdown in merger-and-acquisition activity.

A successful sale will continue a wave of global consolidation in the liquor industry. In the past several years, Grey Goose vodka was sold to Bacardi, LVMH Moët Hennessy Louis Vuitton SA bought Glenmorangie Scotch, and Pernod Ricard bought Allied Domecq and a chunk of the Seagram's drinks empire.

Pernod Ricard's experience in integrating acquisitions was one of the French company's selling points to V&S. It also has a global distribution network that could be combined with V&S's to create cost savings.

Deerfield, Ill.-based Fortune Brands, which also makes construction products, has been hurt by the downturn in the U.S. housing market, which has pushed down the company's stock by nearly 20% and might have hurt its ability to bid more.

Fortune, which had teamed up with private-equity firm Nordic Capital, had been regarded as the bidder to beat because it already distributes Absolut in the U.S. and is part of a joint venture with V&S to distribute the liquor outside the U.S. Anyone else buying Absolut will have to pay a penalty to break the distribution agreements, which analysts estimate could cost as much as €300 million ($473 million).