Two bidders left in battle for Seagram drinks
The fight for Captain Morgan rum, Martell cognac and the rest of Seagram's drinks has become a two-horse race between Allied Domecq and a team made up of Diageo and Pernod Ricard.
With only weeks to go before a final decision is made, other drinks groups, such as Bacardi and Brown-Forman, and a management buy-out team have dropped out of the bidding battle.
The two rivals are due to table their final offers by the end of this month, which will change the face of the range of spirits available to pubs and bars.
By swallowing up the world's third biggest drinks group, it would give even more power to the winner. Diageo's UDV-Guinness, headed by Jack Keenan, is already number one, Allied is second largest and Pernod Ricard is in fifth place.
This will put even more pressure on brands owned by smaller drinks groups who cannot compete with the giants' spending power, and this is likely to lead to more minor brands disappearing.
Seagram's portfolio, which also includes Chivas Regal, Crown Royal and Glenlivet whiskies and Perrier-Jouët and Mumm champagnes, is expected to fetch over £4.5bn.
If Diageo and Pernod Ricard's joint bid is successful, the brands will be shared out between the two, although the French are likely to get the lion's share.
The deal may not include Seagram's rights to distribute Absolut vodka outside Sweden. The brand's owner Vin & Sprit favours Allied Domecq, which does not own a vodka.
Pernod Ricard's chief executive Patrick Ricard confirmed his belief in his group's chances of winning despite reporting disappointing half-year results.
It revealed net attributable profits were unchanged at £48m, although it predicted a bigger rise in operating profits for the full year.
The Paris-based group was last week said to be close to a sale of its Orangina soft drinks business to Britain's Cadbury Schweppes, with the deal expected to raise £450m.
The bidding for Seagram's drinks business does not include its off licence and on-trade delivery business Oddbins, which is being disposed of separately.
Estimated to be worth about £50m, Oddbins was last week said to be of interest to Richard Branson's newest venture, Virgin Wine, a home delivery wine business.
Keenan earned a bonus of £1.1m last year, which pushed his total salary to £2.1m including other benefits, according to Diageo's annual report.
As deputy chief executive of the newly formed main operating unit Guinness-UDV, he was rewarded because of the performance of UDV's spirits brands, such as Smirnoff vodka and Johnnie Walker whisky.
The second-highest salary was the £1.5m earned by group chief executive Paul Walsh.
