PLANNING FOR ABSOLUT IN ’07
With the holidays upon us and cheer in the air, we can’t help but wonder how the big boys will fair. Yes, rhymes are cheesy, but we got your attention didn’t we? In the next couple of days WSD plans on taking a look at the issues facing us in 2007, and what the heads of the companies have to say (if anything at all).
The one acquisition that is most on everybody’s mind is V&S-run Absolut, especially since the Swedish government announced last week that Absolut would definitely go for sale.
FORTUNE. WSD predicts that Fortune’s alcohol beverage division, Beam Wine and Spirits, is one of the most likely candidates, and here’s why. For starters, Beam lacks a major vodka brand of its own and Absolut ranks as the 2nd most popular premium vodka in the world (which is why Wall Street analysts are estimating that Absolut could go for as much as $4 billion). Also, Beam already imports and distributes Absolut in the U.S. as a part of the MAXXIUM distribution agreement.
ANHEUSER-BUSCH. Another likely contender? Believe it or not, Anheuser-Busch. We think A-B is at least looking into Absolut, which would make a very interesting acquisition indeed. As most of you know, the beer industry has seen better days and A-B’s newest chief, August Busch IV, has expressed interest in entering the premium spirits market.
[Ed. Note: We believe wine is another viable option for the beer giant, but the wine industry is much trickier than spirits, which would provide a much steadier and fatter profit stream.]
And of course there’s a good chance that Pernod, Constellation or Brown-Forman could make the ultimate move – and who’s to say that it couldn’t happen – but for some reason we’re not as convinced.
PERNOD. We know Pernod would love to gets its hands on a nice premium vodka, but we feel like tequila might be more of an interest for the French company. If it were truly interested in adding Absolut, Pernod would probably have to relax its Stolichnaya distribution according to analysts.
BROWN-FORMAN. With the recent purchase of Herradura, Brown-Forman has been in a fairly acquisitive mood lately, and has also shown interest in Absolut.
CONSTELLATION. WSD feels confident that Constellation is still interested in beefing up its premium spirits portfolio, but recent mergers/acquisitions (Mondavi and Vincor) might prevent the company from taking over Absolut.
Chief Richard Sands confirmed last month that the company is keeping a close eye on Absolut, but stated:
“It’s just one out of many potential opportunities. The other ones aren't as public.”
He also claimed that Constellation has “the financial capacity to make additional acquisitions,” but that its strategic value had to be up to par.
DIAGEO. What about King Diageo? Well, the company would likely be prevented from purchasing Absolut because of anti-trust issues due to Smirnoff’s 27% global share.
The one acquisition that is most on everybody’s mind is V&S-run Absolut, especially since the Swedish government announced last week that Absolut would definitely go for sale.
FORTUNE. WSD predicts that Fortune’s alcohol beverage division, Beam Wine and Spirits, is one of the most likely candidates, and here’s why. For starters, Beam lacks a major vodka brand of its own and Absolut ranks as the 2nd most popular premium vodka in the world (which is why Wall Street analysts are estimating that Absolut could go for as much as $4 billion). Also, Beam already imports and distributes Absolut in the U.S. as a part of the MAXXIUM distribution agreement.
ANHEUSER-BUSCH. Another likely contender? Believe it or not, Anheuser-Busch. We think A-B is at least looking into Absolut, which would make a very interesting acquisition indeed. As most of you know, the beer industry has seen better days and A-B’s newest chief, August Busch IV, has expressed interest in entering the premium spirits market.
[Ed. Note: We believe wine is another viable option for the beer giant, but the wine industry is much trickier than spirits, which would provide a much steadier and fatter profit stream.]
And of course there’s a good chance that Pernod, Constellation or Brown-Forman could make the ultimate move – and who’s to say that it couldn’t happen – but for some reason we’re not as convinced.
PERNOD. We know Pernod would love to gets its hands on a nice premium vodka, but we feel like tequila might be more of an interest for the French company. If it were truly interested in adding Absolut, Pernod would probably have to relax its Stolichnaya distribution according to analysts.
BROWN-FORMAN. With the recent purchase of Herradura, Brown-Forman has been in a fairly acquisitive mood lately, and has also shown interest in Absolut.
CONSTELLATION. WSD feels confident that Constellation is still interested in beefing up its premium spirits portfolio, but recent mergers/acquisitions (Mondavi and Vincor) might prevent the company from taking over Absolut.
Chief Richard Sands confirmed last month that the company is keeping a close eye on Absolut, but stated:
“It’s just one out of many potential opportunities. The other ones aren't as public.”
He also claimed that Constellation has “the financial capacity to make additional acquisitions,” but that its strategic value had to be up to par.
DIAGEO. What about King Diageo? Well, the company would likely be prevented from purchasing Absolut because of anti-trust issues due to Smirnoff’s 27% global share.
posted at 12:10 PM
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