LET THE ABSOLUT GAME BEGIN
Its official...Absolut is up for the taking. Now, let the games begin.
The Swedish parliament (called Riksdag) approved plans to sell stakes in Vin & Sprit yesterday. The money the government makes from selling V&S, along with five other companies, is estimated at $35.52 billion and will be used to pay off the national debt.
“It's not part of the government's key tasks to make liquor," said Financial Markets Minister Mats Odell when defending the parliament’s decision against naysayers.
In the past, some of the spirits products (ahem, Brown-Forman) wouldn’t fully own up to their interest in V&S because the Swedish government hadn’t officially approved the sale. Now, spirits companies won’t have that excuse.
Pernod and Beam Global have been the most vocal about their intentions with V&S, and we think the race is really between those two. Not only would Pernod benefit from Absolut’s international spread, but the French company may also see it as a way to get a better deal from SPI (owners of Stoli).
Pernod’s chief Patrick Ricard said during a briefing in China last month that acquiring Stolichnaya and Absolut are the company’s top priorities for the time being.
Beam Global also has a lot to gain from an Absolut buyout. The company already has several ties to V&S, including the European Maxxium joint-venture, a U.S. j-v to create Future Brands, and V&S’s 10% stake in Beam Global.
“In light of that we are very close to them [V&S], we have a great relationship with them...if in fact there is a process we will be very close to it and would be very interested in it,” said Fortune president Bruce Carbonari.
Diageo and Bacardi have also expressed interest, but we feel they may have more obstacles to hurdle.
Diageo in particular would have the greatest difficulty acquiring V&S because of its global Smirnoff brand, the world’s number one vodka. Certainly Diageo would face huge competition issues if it purchased the second largest vodka, Absolut. We’re sure that Diageo would be happy to have a premium vodka brand, but alas, it would probably draw too much attention from the anti-trust guys.
Bacardi would surely benefit from Absolut’s global presence, but it may decide to put its focus elsewhere. A couple of months ago Andreas Gembler wrote a letter to the Swedish government expressing his interest in Absolut and told the Financial Times it would be a “terrific fit.”
At the same time, Andreas has said he in interested in acquiring an American whiskey and cognac, and will perhaps choose to expand the company’s presence in brown spirits instead. Several industry insiders have whispered of the possibility of Bacardi acquiring Remy Cointreau once Remy leaves Maxxium in 2009.
Historically, B-F sticks to buying and developing smaller wine and spirits brands, like Herradura. It’s unlikely that B-F will make a move although it probably could acquire Absolut if it really wanted to.
In Brown-Forman’s fourth quarter conference call earlier this month, Paul Varga refused to comment on whether B-F had planned any trips to Sweden in its immediate future. This development came after Fortune’s chief Norm Wesley openly visited Sweden to meet with “key persons in the sale process.”
The next couple of months should get very interesting as the world’s largest spirits companies strut their feathers and compete for the ownership of Absolut.
The Swedish parliament (called Riksdag) approved plans to sell stakes in Vin & Sprit yesterday. The money the government makes from selling V&S, along with five other companies, is estimated at $35.52 billion and will be used to pay off the national debt.
“It's not part of the government's key tasks to make liquor," said Financial Markets Minister Mats Odell when defending the parliament’s decision against naysayers.
In the past, some of the spirits products (ahem, Brown-Forman) wouldn’t fully own up to their interest in V&S because the Swedish government hadn’t officially approved the sale. Now, spirits companies won’t have that excuse.
Pernod and Beam Global have been the most vocal about their intentions with V&S, and we think the race is really between those two. Not only would Pernod benefit from Absolut’s international spread, but the French company may also see it as a way to get a better deal from SPI (owners of Stoli).
Pernod’s chief Patrick Ricard said during a briefing in China last month that acquiring Stolichnaya and Absolut are the company’s top priorities for the time being.
Beam Global also has a lot to gain from an Absolut buyout. The company already has several ties to V&S, including the European Maxxium joint-venture, a U.S. j-v to create Future Brands, and V&S’s 10% stake in Beam Global.
“In light of that we are very close to them [V&S], we have a great relationship with them...if in fact there is a process we will be very close to it and would be very interested in it,” said Fortune president Bruce Carbonari.
Diageo and Bacardi have also expressed interest, but we feel they may have more obstacles to hurdle.
Diageo in particular would have the greatest difficulty acquiring V&S because of its global Smirnoff brand, the world’s number one vodka. Certainly Diageo would face huge competition issues if it purchased the second largest vodka, Absolut. We’re sure that Diageo would be happy to have a premium vodka brand, but alas, it would probably draw too much attention from the anti-trust guys.
Bacardi would surely benefit from Absolut’s global presence, but it may decide to put its focus elsewhere. A couple of months ago Andreas Gembler wrote a letter to the Swedish government expressing his interest in Absolut and told the Financial Times it would be a “terrific fit.”
At the same time, Andreas has said he in interested in acquiring an American whiskey and cognac, and will perhaps choose to expand the company’s presence in brown spirits instead. Several industry insiders have whispered of the possibility of Bacardi acquiring Remy Cointreau once Remy leaves Maxxium in 2009.
Historically, B-F sticks to buying and developing smaller wine and spirits brands, like Herradura. It’s unlikely that B-F will make a move although it probably could acquire Absolut if it really wanted to.
In Brown-Forman’s fourth quarter conference call earlier this month, Paul Varga refused to comment on whether B-F had planned any trips to Sweden in its immediate future. This development came after Fortune’s chief Norm Wesley openly visited Sweden to meet with “key persons in the sale process.”
The next couple of months should get very interesting as the world’s largest spirits companies strut their feathers and compete for the ownership of Absolut.
posted at 9:32 AM
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