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.
Here's a round-up of the top stories on just-drinks last week, featuring Carlsberg, Heineken, Coca-Cola Amatil, California's winelands and Cognac....
The Coca-Cola Co's Keurig Cold machine won't be out until next year. But co-developer Keurig Green Mountain has given us a taste with the unveiling this weekend of another at-home beverage platform, t...
It's a bank holiday here in the UK on Monday (25 August). just-drinks' team will be taking a well-earned lie down. ...
Poland is hardly noted for its cider consumption, but all this could be about to change. ...
- Comment - Another One Bites Bacardi's Dust
- just The Preview - Pernod Ricard's Q4 & FY
- Comment - Hybrid Spirits: Innovation or Laziness?
- Brown-Forman's Q1 Performance by Region, Brand
- CCA - Coca-Cola's Canary in the Mine
- Mast-Jägermeister targets UK off-trade boost
- Bacardi announces CFO switch
- SABMiller exec to become CFO at Beam Suntory
- Brown-Forman unveils Jack Daniel's UK push
- Champagne will not regain lost ground until 2018