 The clearance is good news for Pernod boss Patrick Ricard |
Pernod Ricard has cleared a major hurdle in its bid to acquire Allied Domecq after the deal was approved by US competition authorities. The �7.4bn ($14bn) deal was cleared by the Federal Trade Commission and the Department of Justice on condition that Pernod sell a number of brands.
Pernod has already agreed to sell brands such as Courvoisier to its bid partner, US firm Fortune Brands.
Shares in both Pernod Ricard and Allied Domecq rose on the news.
Share boost
Allied shares rose 1.3% in London while Pernod shares were up 1.2% in mid-morning trading in Paris.
The US authorities approved the deal on condition that Pernod fulfils its proposed �2.8bn transfer of some Allied brands to Fortune Brands.
 | World's biggest spirits companies* Diageo - maker of Smirnoff vodka and Johnnie Walker whisky, 91 million cases Pernod Ricard - maker of Chivas Regal whisky and Martell cognac, 48 million cases Allied Domecq - maker of Beefeater gin and Kahlua liqueur, 47 million cases Bacardi - maker of Bacardi rum and Bombay Sapphire gin, 38 million cases Fortune Brands - maker of Jim Beam bourbon, 23 million cases Brown Forman - maker of Jack Daniel's whisky and Southern Comfort, 15 million cases Vin & Sprit - maker of Absolut vodka, 14 million cases *Measured in annual sales of 12-bottle cases of spirits. Source: Reuters |
These include Courvoisier and Sauza tequila. However, the Federal Trade Commission said that it would continue to scrutinise Pernod's ownership of the Canadian Club and Maker's Mark whisky brands.
Allied also plans to sell Bushmills whisky to Diageo as part of the transaction.
Canadian approval
The deal has already been approved by the European Commission but has still to be given the green light by Canadian regulators and by Allied's own shareholders.
The French firm sees the deal, part of a wave of consolidation in the drinks industry, as a way of expanding its business in the US.
A combination of Pernod and Allied, the world's second and third- largest drinks companies, will increase the pressure on market leader Diageo, owner of Guinness and Smirnoff.
It will bring popular brands such as Chivas Regal scotch, Martell Cognac, Beefeater gin and Malibu rum under the same roof.
Pernod looked likely to face a rival bid from Constellation but the world's largest winemaker last month dropped plans to get involved.
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