Pernod Ricard is looking at Allied Domecq as a potential acquisition, according to press reports. Both the Wall Street Journal and the Financial Times' Website said today (4 February) that the French-based wine and spirits company is studying a possible takeover of the UK-based drinks firm.

People familiar with the matter were cited in the reports.

Although the two drinks companies have not been in contact yet, the sources said, Pernod has apparently asked J.P. Morgan and Morgan Stanley to explore potential acquisitions among a list of companies that will allow it to expand its global reach.

Both Pernod and Allied have said that they are aware that consolidation is expected within the industry. Pernod's distribution network can take more volume without incurring extra costs, the Financial Times said.

"There are no talks at the moment," The Financial Times quotes an unnamed source as saying.

A spokesman for AD said the idea of a merger between the two companies was "speculation." Pernod declined to comment, as did JP Morgan and Morgan Stanley.