The deal means that one of the last remaining pieces has fallen into place in the global drinks jigsaw puzzle. But it paints Allied - now to change its name to Allied Domecq - into a corner, with a drinks portfolio firmly tied to Europe and South America, while its two big rivals stride ahead in the race to win the hearts and minds of Asian tipplers.
While most of Europe and North America is sewn up by the giants, more and more of the wealth being generated by the Far East economies is being turned into consumer goods. And the most conspicuous way of displaying wealth is go to a night club and order a bottle of an expensive, internationally recognised liquor.
Increasingly fierce competition for global brands is throwing the international spotlight on the handful of independent drinks producers, all of which are being wooed by the majors.
Prime target is Bacardi, the privately owned rum and Martini group founded over 130 years ago. Bacardi is the world's biggest-selling spirits brand, making the company the most sought-after prize outside the big battalions.
This intense rivalry among the top four drinks groups meant that Allied, the Dunkin' Donuts and Tetley tea group, had to move decisively to secure the future of the long-standing link with Domecq after its 500 family shareholders made it plain they wanted to cash in their stake.
'It was a very good investment for them,' explained Tony Hales, Allied's youthful chief executive, 'but they got very little income from it.'
Although Ramon Mora-Figueroa, Domecq's chief executive, will retain a 27 per cent stake in the business, his six- year put option underlines the fact that the opportunity was good enough to make Allied break its normal rule of basing its global strategy on partnerships.
Allied can now put all of Domecq's annual sales of 22 million cases with its own 23 million to claim second spot in the world drinks league behind Grand Met's International Distillers and Vintners (IDV).
'It's a diminishing world stage,' said one leading analyst. ''Allied gets hands-on distribution in two growing markets, at a fair price.' That price, it should be noted, adds up to 23 times annual earnings after allowing for restructuring, debt and a pounds 75m fair-value adjustment.
But Allied's simultaneous strength and weakness is that its power is now more firmly concentrated in Europe and Latin America with, through the North Atlantic Free Trade Area, a ticket to the United States through Mexico, where Domecq earns most of its profits.
Certainly Allied is in a strong position to consolidate its success in Spain, where Guinness has had problems. And Mr Hales sees Mexico as the most exciting market in Central or South America.
'It has a huge population,' Mr Hales pointed out, 'with 85 million people, of whom 63 per cent are aged 22 or under. One of the first things they do when they can afford it is buy branded consumer goods, including liquor. We see great possibilities there.'
The group has also started building pubs in Hungary as part of a campaign to put its marker down in Eastern Europe, where it is already dominates the scotch market. That region, too, could pay big dividends in the early part of the next century.
Meanwhile, with a few exceptions such as Courvoisier brandy, Beefeater gin and Ballantine's scotch, few of Allied's labels would set drinkers licking their lips in the overpriced bars of South-east Asia.
By contrast, no self-respecting bar in the Pacific is complete without the obligatory range of Johnnie Walker bottles on the back shelf, from Red Label through Black to Blue, Gold and Premier. The famous stout produced by its parent, Guinness, has also been a favourite in Africa and Asia for many years, thanks to laxer advertising rules permitting the company to assert the sentiment long forbidden in Britain, that Guinness is good for you.
And IDV has not been idle. Last year, it broke away from Seagram to control its own distribution in the Far East, bought drinks companies in Hong Kong and Singapore, launched one joint venture in Thailand and another in Japan.
IDV separately sells Baileys, Smirnoff and other brands through its own company, Heublein Japan.
'We have high hopes for J&B Jet, the premium scotch which we've launched in a number of Far East markets,' said John McGrath, IDV's chief executive. 'We've also launched Baileys Gold, a Japan-only product containing Irish malt whiskey. It's now being test- marketed in Yokohama.'
Mr Hales is all too well aware of the importance of the fast-growing Pacific market. Ballantine's and Courvoisier are distributed in Japan by Suntory, and the group has seven offices in China. But that leaves it with considerable ground to make up.
'I don't think there is a huge difference between the strategies being employed by the major drinks companies,' Mr Hales claimed. 'In the total world liquor market, 7 per cent is taken up by the major international brands, so there is a hell of a lot of room for the major brands to grow at the expense, in many cases, of local rice or cane liquors, without having directly to cut each other's throats or margins.'
So the big four are trying to put their effort behind their world-class international brands by buying into local distribution companies. In that way they control the marketing and distribution of those brands and take a slice of the distributor's margin as well as their own producer margin.
These networks mean that when the big groups add brands, they can be fed through the system at very little extra cost. That is why they can afford to offer higher and higher prices for still-unattached companies. Mr Hales has his eyes on some potential partnership deals in India and China, but the most tempting tie-ups are in the West.
Bacardi has maintained all the tact and diplomacy of a Japanese geisha girl in keeping all its corporate suitors at bay. However, if one would-be purchaser has its nose in front of the others it is Guinness.
The two companies have a joint venture distribution company in Spain called Baguin, which handles Johnnie Walker, Gordon's, Tanqueray, Martini and Bacardi. Baguin also owns the Spanish wine producer Marques de Monistrol.
----------------------------------------------------------------- WHO OWNS WHAT IN THE GLOBAL DRINKS WAR ----------------------------------------------------------------- How the brands line up after the takeover Allied Domecq GrandMet Guinness Seagrams Ballantine's J&B Rare Johnnie Walker Armagnac Beefeater Jack Daniels Dewar's Martell Canadian Club Southern Comfort Bell's Chivas Regal Tetley Smirnoff Old Parr Glenlivet Kahlua Bailey's Black & White Glen Grant Domecq Malibu Gordon's Sandemann Presidente Cinzano Booth's Hundred Pipers Don Pedro Black Velvet Pimm's Crown Royal Fundador Bombay Gin Cossack Mumm DYC Piat d'Or Tanqueray Pierre-Jouet Tequila Sauza Metaxa Guinness Captain Morgan Teacher's Heublein Buchanan's Four Roses Courvoisier Popov Vat 69 Passport Harvey's Croft Original Haig Barton & Guestier Tia Maria Grand Marnier Dimple Cordon Rouge La Ina Jose Cuervo Rebel Yell Crown Royal -----------------------------------------------------------------
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