Blog: Drinks group for sale, good runner, one careful owner, US$6bn O.N.O
Olly Wehring | 25 June 2007
The sale of Vin & Sprit, which includes one of the drinks industry’s brightest stars in Absolut Vodka, has at last been given the green light by the Swedish authorities.
The country’s parliament voted by 146 to 121 last week in favour of privatising six state-owned companies, including the liquor group.
The closeness of the vote, added to the latest opinion polls in Sweden that suggest almost half of the population don’t want to see the privatisation, demonstrates how politically sensitive this sale is going to be. All potential suitors are going to have to tread carefully.
But that hasn’t stopped the world’s major drinks groups preparing to slug it out to gain one of the most iconic brands in the spirits sector. Diageo and Fortune Brands have already demonstrated an interest. They are bound to be joined at the negotiating table soon by the likes of Bacardi, Pernod Ricard and a smattering of the world’s private equity groups.
With its existing commercial ties, Fortune remains the favourite at the moment and CEO Norman Wesley has been the most vocal suitor so far. "We believe that making the partnership we share with V&S permanent would be good for both companies,” he said last week, adding: "As a partner and not a competitor, we believe Fortune Brands is in a unique position to maintain the momentum of V&S, protect the heritage of the brands and preserve jobs in Sweden.”
The stakes are going to be high. Not only will Absolut add clout to whichever portfolio it’s added to – it’s 128 years old, but still growing at 7% in 2006 - but one analyst I spoke to last month believed this could be the last deal in the spirits industry of this size for some time. There are other companies out there of similar size and appeal, he argued, such as Brown-Forman, Bacardi and Fortune itself, but all are run by families who are loath to sell-out.
As such, an estimated price tag of US$5-$6 billion has already been linked to V&S. Add in the extra spice the political angle lends this story and we could have the most watchable bidding war on our hands since Allied fell to Pernod and Diageo.
The UK health lobby is always very vocal on alcohol at this time of year, predictably so, and this year is no different. ...
“Ah, yes, you've hit upon a very sensitive area,” says Thomas, my guide at the Carlsberg Brewery in Copenhagen last Friday....
Experimentation has long been a watchword in the Scotch whisky industry. It is what has given consumers the huge range of ageing options, from refill hogsheads to virgin oak to Sherry butts....
Advertising can be a strange beast. ...
- Comment - The Appeal and Perils of Craft
- Review of the Year 2014 - Part IV: Spirits
- Time is Right for Refresco Gerber Exit
- Sustainability in Wine - Part I
- just the Ten - Top News Stories of 2014
- Belvédère to sell assets, streamline portfolio
- Belvedere vodka tie-up over new James Bond film
- Diageo ups focus on China with Mortlach roll-out
- Diageo rolls out Beckham's Haig Club to US
- Brown-Forman eyeing Scotch, Irish whisk(e)y entry?
- Global vodka insights - market forecasts, product innovation and consumer trends research
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research
- The IWSR Forecast Report - 2014-2019 Global Review
- Global Tequila Market 2014-2018
- Global market review of non-Scotch whiskies – forecasts to 2018