Alert: Pernod and Fortune Agree to Early Termination for Absolut
Fortune Brands and Pernod Ricard today announced an agreement under which Fortune will receive compensation in exchange for early termination of the company's distribution agreement with Pernod's Absolut vodka and other brands.
Under the agreement, Pernod Ricard will pay Fortune Brands $230 million in pre-tax proceeds, and Fortune Brands will turn around and pay $100 million back to Pernod to acquire the Cruzan Rum brand. The agreement will result in the termination as of October 1st of the U.S. distribution agreement between Fortune Brands' Beam Global Spirits & Wine business and the U.S. business of V&S Group recently acquired by Pernod. The joint distribution agreement had been scheduled to remain in place through February of 2012.
"This is a win-win agreement that provides significant benefits to Fortune Brands," said Bruce Carbonari, president and chief executive officer of Fortune Brands. "In exchange for accelerating the end of our U.S. distribution agreement with Absolut, we'll receive a cash payment of $230 million. We're also pleased that we'll acquire a fast-growing premium rum brand. Rum is one of the most attractive spirits categories, and the addition of Cruzan fills a portfolio gap in premium rum with the category's fastest growing brand in the U.S."
"Importantly, by transitioning to a dedicated sales force focused solely on our brands, we'll simplify our route to market in the U.S. and enjoy greater control over our distribution," Carbonari added. "Our seven-year partnership with Absolut served its purpose, but our spirits business is a much bigger company today with the scale and leading positions in key spirits categories to fully leverage the strengths of a dedicated sales force."
"We believe moving forward now with this distribution solution will provide valuable clarity and sharper focus to our sales force, and will better support Beam Global's vision of 'building brands people want to talk about,'" said Tom Flocco, president and chief executive officer of Beam Global Spirits & Wine.
The company's Beam Global spirits business is the fourth largest premium spirits business in the world, and its case volume going forward will be the second largest in the U.S.
"This transaction serves shareholders significantly better than allowing the distribution partnership to expire in 2012," Carbonari said. "The termination payment from Pernod more than compensates for our higher costs of distribution over the remaining term of the joint venture agreement. From a strategic perspective, we'll also benefit from a dedicated U.S. sales force. And we see significant upside potential over the long term from the Cruzan Rum brand."
Until tomorrow, Megan
Under the agreement, Pernod Ricard will pay Fortune Brands $230 million in pre-tax proceeds, and Fortune Brands will turn around and pay $100 million back to Pernod to acquire the Cruzan Rum brand. The agreement will result in the termination as of October 1st of the U.S. distribution agreement between Fortune Brands' Beam Global Spirits & Wine business and the U.S. business of V&S Group recently acquired by Pernod. The joint distribution agreement had been scheduled to remain in place through February of 2012.
"This is a win-win agreement that provides significant benefits to Fortune Brands," said Bruce Carbonari, president and chief executive officer of Fortune Brands. "In exchange for accelerating the end of our U.S. distribution agreement with Absolut, we'll receive a cash payment of $230 million. We're also pleased that we'll acquire a fast-growing premium rum brand. Rum is one of the most attractive spirits categories, and the addition of Cruzan fills a portfolio gap in premium rum with the category's fastest growing brand in the U.S."
"Importantly, by transitioning to a dedicated sales force focused solely on our brands, we'll simplify our route to market in the U.S. and enjoy greater control over our distribution," Carbonari added. "Our seven-year partnership with Absolut served its purpose, but our spirits business is a much bigger company today with the scale and leading positions in key spirits categories to fully leverage the strengths of a dedicated sales force."
"We believe moving forward now with this distribution solution will provide valuable clarity and sharper focus to our sales force, and will better support Beam Global's vision of 'building brands people want to talk about,'" said Tom Flocco, president and chief executive officer of Beam Global Spirits & Wine.
The company's Beam Global spirits business is the fourth largest premium spirits business in the world, and its case volume going forward will be the second largest in the U.S.
"This transaction serves shareholders significantly better than allowing the distribution partnership to expire in 2012," Carbonari said. "The termination payment from Pernod more than compensates for our higher costs of distribution over the remaining term of the joint venture agreement. From a strategic perspective, we'll also benefit from a dedicated U.S. sales force. And we see significant upside potential over the long term from the Cruzan Rum brand."
Until tomorrow, Megan
posted at 3:40 PM
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