Allied backing Pernod Ricard offer
Thursday, 21 April 2005French spirits group Pernod Ricard, which owns Irish Distillers, has launched a friendly £7.4 billion bid for British rival Allied Domecq.
Allied is recommending a cash-plus-shares deal which will create a company to challenge market leader Diageo. Pernod says the deal values each Allied share at 670p sterling.
The deal involves Pernod's selling a string of spirits brands such as Maker's Mark bourbon and Courvoisier cognac to US drinks group Fortune Brands for £2.8 billion.
Pernod said the deal made 'compelling' financial and strategic sense as it creates the second largest spirits and wines group in the world and will generate savings of €300m a year.
Pernod is acquiring many of the biggest brands in the drinks industry including Beefeater gin, Malibu, Tia Maria, Kahlua, Stolichnaya vodka and Ballantine's scotch. It will also retain premium wines such as Mumm, Montana and Perrier Jouet.
The agreement to sell the remaining brands to Fortune - best-known for making Jim Beam bourbon - will help the deal clear regulatory hurdles. In the cognac market, Pernod already owns the Martell brand and the acquisition of Courvoisier would have taken its share to more than 50%.
