Pernod buys Absolut
French company Pernod Ricard SA, the #2 seller of liquor in the world, announced it would buy Swedish company Vin & Sprit, the owner of the Absolut vodka brand. The deal was for $8.34 billion, not including debt that will push the cost up by almost half a billion dollars.
According to a Bloomberg News story, Pernod beat out Diageo (#1 in spirits) and Fortune Brands as well as a [private buyer, in gaining the company. Vin & Spirit is a subsidiary of the Swedish government, and was sold to pay off debt and get out of the retail business. Curiously, Fortune Brands has set up a joint entity for distrusting Absolut in the US. That deal holds until 2012.
Vodka is a key area for Pernod, as it is growing faster than any other spirit. Absolut is the #2 vodka brand in the US, after arch-rival Diageo's Smirnoff brand. Pernod will drop the Stolichnaya brand, which it has a license to sell outside of Russia. Pernod plans to sell off some of Vin & Spirit's other liquor brands, including Plymouth gin.
Pernod brands include: The Glenlivet, Abderdour, Ballantine's, and Passport (scotch); Jameson and Bushmills (Irish whisky); Wild Turkey (bourbon); Canadian Club (rye); Havana Club (rum); Boodles, Beefeater's, and Seagram's (gin); Seagram’s (vodka); Martell (brandy); plus various wines and liqueurs, including its own Pernod aperitif, Tia MAria, and Lahlua.
This is part of the continuing consolidation of the liquor industry, as we have seen over the years. A Wall Street Journal article ("Pernod Ricard Wins Auction for Vin & Sprit", 3/31/06) notes the trend: "In the past several years, Grey Goose vodka was sold to Bacardi, LVMH Moët Hennessy Louis Vuitton SA bought Glenmorangie Scotch, and Pernod Ricard bought Allied Domecq and a chunk of the Seagram's drinks empire."
