UK: Absolut pulled from Seagram deal
The result of the decision will be to wipe billions of dollars off the value of Seagram's drinks arm. V&S it is believed wants to sell its distribution rights off in a piecemeal fashion geographically.
One analyst said that the loss of Absolut could see Seagram's value fall from $8.4 billion to around $6 billion.
Recent rumours that V&S and Allied Domecq would submit a joint bid are now considered unfounded. It is seen unlikely that V&S, as a government body, would want the secondary and tertiary brands that Allied Domecq spun off. The deal for the Absolut rights are now expected to be negotiated after Seagram has been sold.
The removal of Absolut might be to Allied's favour anyway. The smaller bidding price will be in Allied's favour, who are financially weaker than nearest rivals Diageo, but who can deliver far greater cost savings than anyone else on the deal.
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Fideuram Wargny has upgraded its rating of Pernod Ricard to 'buy' from 'hold'. Its analysts argue that the merger talks with Allied Domecq is a catalyst for share growth....
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Fortune Brands has started making moves to acquire in the European drinks industry, according to press reports....
Diageo's Smirnoff Signatures line of premixed cocktails is now available nationwide in the US....
Diageo is poised to cut back its presence in Germany, according to local reports....
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