LONDON (ShareCast) - Pernod Ricard has snapped up Absolut vodka owner Vin & Sprit from the Swedish government for €5.6bn (£4.4m) in cash after coming out tops in a four-way auction.
The French drinks giant beat off rival bids from US giant Fortune Brands, privately held Bacardi and the Wallenberg family as it looks to compete with Diageo’s market-leading Smirnoff brand in the US.
Johnnie Walker and Captain Morgan group Diageo pulled out of the bidding in February after buying a 50% stake in Ketel One super-premium vodka for $900m.
Pernod, which also owns Jameson Irish whisky and Malibu rum, is paying 20.8 times earnings before interest, taxes, depreciation and amortization, prior to any savings.
Last year, V&S reported an underlying profit of €270m, with 40% of sales generated by Absolut. Cost savings of between €125m and €150m a year are expected within two to four years.
The Swedish government plans to use the cash to pay down foreign debt.
Meanwhile, the acquisition of UK brewer Scottish & Newcastle moved closer today after its shareholders approved the £7.8bn takeover of the group by Heineken and Carlsberg.
The 800p a share deal, cleared by the European Commission earlier this month, is expected to complete late April.
Under the break-up plan, the owner of Kronenberg, John Smith's and Strongbow will transfer its Baltic Beverages to Carlsberg, as well as its French, Greek, Chinese and Vietnamese operations.
Heineken will hold the remaining businesses, principally the UK and Ireland, Portuguese, Finnish, Belgian, US and Indian operations.
0.000p ()
