Diageo given nod on Seagram deal but must drop Malibu
Diageo has at last been given clearance to proceed with the £5.6bn takeover of Seagram's spirit portfolio on the condition it disposed of its white rum brand Malibu.
The federal trade commission insisted on the concession because the deal would have left only two significant owners of rum in the US, with Diageo owning two of the top three best rums - Captain Morgans and Malibu (pictured).
There are already a couple of buyers ready to make offers for Malibu. Potential bidders include Pernod Ricard - Diageo's partner in the Seagram acquisition - Allied Domecq, Remy Cointreau and Brown Foreman.
Diageo has six months to agree to, and complete, the disposal.
The green light was given a year after Diageo and Pernod Ricard agreed a joint deal to share out the spirits business of Seagram.
Pernod is contributing £3.2bn to the deal and will take Seagram's Gin, the whiskey brands Chivas Regal and Glenlivet, and Martell Cognac - making it one of the top three spirits companies in the world.
The approval will trigger the sale of a number of non-core Seagram assets which were acquired in the deal. Oddbins, the off-licence chain, Four Roses bourbon and Sandeman Port and Mumm sparkling wine are to be sold.
Related stories:
Diageo set to drop Malibu to save deal (1 November 2001)
Seagram sale blocked in the US (24 October 2001)
Diageo's profits boosted by strength of its brands (10 September 2001)
Brands change hands after acquisition of Seagram Drinks (26 March 2001)
Seagram sales face delay (5 March 2001)
