US. Pernod Ricard has signed an agreement with Fortune Brands to terminate early the distribution by Future Brands of Vin & Sprit brands in the US, including Absolut vodka, effective 1 October 2008. Pernod Ricard will pay Fortune Brands US$230 million in compensation.
The distribution agreement for V&S brands by Future Brands, a joint-venture company between V&S and Fortune Brands, was originally scheduled to end on February 2012.
Together with the termination of the distribution, V&S will also stop being a shareholder in Future Brands.
Absolut and the rest of the V&S brands will join Pernod Ricard USA’s portfolio on 1 October 2008. The savings generated by stopping the payments of commissions to Future Brands, the quicker-than-anticipated implementation of cost synergies on its North American structures and the “very positive” impact of an immediate combination of our brand portfolios in the US would more than offset the costs of exiting this agreement, Pernod Ricard said.
Separately, and as part of the announced disposal plan, Pernod Ricard will sell the Cruzan rum brand and related assets to Fortune Brands for US$100 million. Cruzan was acquired by V&S in 2005 and has since been a fast-growing brand, reaching more than 750,000 nine-litre cases in 2007.
Commenting on this deal, Pernod Ricard Chairman Patrick Ricard stated: “The immediate takeover of Absolut distribution in the US by Pernod Ricard USA is excellent news for the group. We will now market and distribute the leading imported spirit and premium vodka in the US, which greatly enhances our position. Through both our size and the quality of our portfolio, we are now the clear number two in the North American spirits market. These factors will allow us to strengthen our growth in this key market.”
Pernod Ricard acquired Vin & Sprit in July 2008, making it the world’s co-leader in wines and spirits with sales of €6,589 billion in 2007/08.
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Pernod Ricard completes V&S acquisition – 24/07/08
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