ABSOLUT BIDDING TO BEGIN NEXT MONTH
It looks like the Swedish government auction to sell V&S for about $5-6 billion could begin as early as next month. A news report at bloomberg.com is basing its claim on “five people with direct knowledge of the planned transaction.”
Potential bidders, including Pernod, Bacardi, Fortune and Diageo, will receive details of the auction by mid-October, according to the Bloomberg sources. They declined to be named before a sale is final.
The company that ultimately wins the auction could quite possibly become the proud parent of the Absolut, Cruzan and Plymouth brands. That of course depends on how the Swedish government chooses to conduct the sale – whether they will keep V&S in tact or sell it on a brand by brand basis.
“The government is unlikely to favor an initial public offering...the state hasn't indicated whether it will sell all of V&S or just the business involving Absolut,” said the report.
Meanwhile, a spokeswoman for Financial Markets Minister Mats Odell said the government has not yet issued a timetable and does not comment on specific timing or pricing.
FORTUNE. In our opinion, Fortune Brands has by far been the most outwardly aggressive company. The company’s chairman Norm Wesley has reportedly made numerous trips to Sweden and has spoken of his interest quite openly in the press. In August, Norm outlined several reasons why Pernod, Diageo and Bacardi would have problems acquiring Absolut, including anti-trust issues. Norm urged the Swedish government to go with Fortune if it wants to secure Swedish jobs and keep the company from splitting. Furthermore, not only does the company currently distribute Absolut in the US, but Fortune also has a relationship with V&S through its Maxxium joint-venture.
PERNOD. Pernod says it is interested in purchasing all of V&S, but has noted it will have to choose between Stoli and Absolut. As you’ll recall, Pernod has been in talks to acquire the entire Stoli brand for several years.
DIAGEO. Meanwhile, Diageo and Bacardi are keeping relatively quiet. Diageo already owns the top global vodka (Smirnoff) and would likely face anti-trust issues if it tries to acquire Absolut. Therefore, the company has appeared reluctant to show too much interest.
In late August, Paul Walsh told the Sunday Times, “It's [Absolut] nice to have but we don't have to have it. It's a bit different from Seagram - we had to have that. It moved us a quantum leap away from the rest of the pack, particularly in America.”
BACARDI. As a private company, Bacardi has said very little concerning Absolut other than spokeswoman Pat Neal confirming in May that the company sent a letter to Sweden’s government requesting a meeting.
Several analysts and industry insiders have cited Bacardi as the most likely candidate for V&S because it is in the best position to pay the highest price for the company. The question is whether they are willing to pay $6 billion, especially since Bacardi already has a successful vodka brand (Grey Goose). Only time will tell.
Potential bidders, including Pernod, Bacardi, Fortune and Diageo, will receive details of the auction by mid-October, according to the Bloomberg sources. They declined to be named before a sale is final.
The company that ultimately wins the auction could quite possibly become the proud parent of the Absolut, Cruzan and Plymouth brands. That of course depends on how the Swedish government chooses to conduct the sale – whether they will keep V&S in tact or sell it on a brand by brand basis.
“The government is unlikely to favor an initial public offering...the state hasn't indicated whether it will sell all of V&S or just the business involving Absolut,” said the report.
Meanwhile, a spokeswoman for Financial Markets Minister Mats Odell said the government has not yet issued a timetable and does not comment on specific timing or pricing.
FORTUNE. In our opinion, Fortune Brands has by far been the most outwardly aggressive company. The company’s chairman Norm Wesley has reportedly made numerous trips to Sweden and has spoken of his interest quite openly in the press. In August, Norm outlined several reasons why Pernod, Diageo and Bacardi would have problems acquiring Absolut, including anti-trust issues. Norm urged the Swedish government to go with Fortune if it wants to secure Swedish jobs and keep the company from splitting. Furthermore, not only does the company currently distribute Absolut in the US, but Fortune also has a relationship with V&S through its Maxxium joint-venture.
PERNOD. Pernod says it is interested in purchasing all of V&S, but has noted it will have to choose between Stoli and Absolut. As you’ll recall, Pernod has been in talks to acquire the entire Stoli brand for several years.
DIAGEO. Meanwhile, Diageo and Bacardi are keeping relatively quiet. Diageo already owns the top global vodka (Smirnoff) and would likely face anti-trust issues if it tries to acquire Absolut. Therefore, the company has appeared reluctant to show too much interest.
In late August, Paul Walsh told the Sunday Times, “It's [Absolut] nice to have but we don't have to have it. It's a bit different from Seagram - we had to have that. It moved us a quantum leap away from the rest of the pack, particularly in America.”
BACARDI. As a private company, Bacardi has said very little concerning Absolut other than spokeswoman Pat Neal confirming in May that the company sent a letter to Sweden’s government requesting a meeting.
Several analysts and industry insiders have cited Bacardi as the most likely candidate for V&S because it is in the best position to pay the highest price for the company. The question is whether they are willing to pay $6 billion, especially since Bacardi already has a successful vodka brand (Grey Goose). Only time will tell.
posted at 2:33 PM
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