UK: Allied Domecq Statement re Seagram.
Allied Domecq announced today that it did not submit a bid in the auction of the Seagram Wines and Spirits business as it would not have been in the interests of its shareholders. The Board of Allied Domecq took the decision after evaluating the commercial and strategic benefits already gained for the company from today's announcement of the acquisition of the Mumm and Perrier-Jouet champagne businesses, the award of the exclusive right to distribute Stolichnaya in the USA and the agreement with Destileria Seralles for the future ownership of Captain Morgan Rum.
Allied Domecq also confirmed that it had declined to sign the letter of confidentiality stipulated as a condition of the auction process. The conditions imposed by the letter of confidentiality were unusually onerous and would have made it impossible to conclude the champagne, rum and vodka agreements.
Chief Executive Philip Bowman said: "Allied Domecq's key objectives were to extend its portfolio and in particular to secure major international rum and vodka brands. Our agreement with Destileria Seralles puts us in a position to acquire the Captain Morgan Rum trademark and distribution rights. We have signed the agreement with Soyuzplodimport and secured the exclusive right to distribute Stolichnaya vodka in the USA. In addition, we have the right of first refusal to renew that agreement at the end of the ten-year term and the right of first refusal over the distribution and trademark rights to the brand as they become available in markets outside the USA. The acquisition of the Mumm and Perrier-Jouet champagne businesses is a substantial additional improvement to our international brand portfolio.
"We remain committed to securing the maximum advantage for our shareholders from the process of industry consolidation. Through the champagne, rum and vodka transactions, we have substantially achieved the strategic and commercial objectives that might have been obtained through the sale of the whole of the Seagram Wines and Spirits business. These will be achieved without the risk of the integration of a large and disparate brand portfolio into our existing business which would have disrupted our existing momentum. In the last financial year Allied Domecq delivered 16% growth in pre-tax profits."
For further information, please contact:
aJane Mussared Allied Domecq plc +44 (0)7880 783532
Anthony Cardew Cardew & Co. +44 (0)20 7930 0777
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