The news came as shareholders in the two UK drinks groups overwhelmingly backed the merger but not without vociferous complaints about its new name. Andrew Yates reports.
"[The name] Diageo is meant to explain giving pleasure every day everywhere. That could apply to a lot of things. Sexual intercourse for instance. Maybe we should rename the group that," said one disgruntled Guinness shareholder yesterday. "This new name is almost unpronounceable. When I first heard it I thought it was pronounced `Dire go'. That sounds like a medicine to prevent some sort of unmentionable stomach disease," he added.
There was widespread condemnation of the Diageo name at the Guinness meeting yesterday afternoon to agree its merger with Grand Metropolitan. At an earlier meeting of GrandMet shareholders there was similar dismay at the choice of the new name.
One GrandMet shareholder said: "When I first heard the name I thought it was pronounced Die Ageo, which leads me to think of food poisoning. Why not have a good old British name instead of one that will be mispronounced around the world."
Tony Greener, Guinness' chairman, faced an uphill battle to convince the increasingly irate shareholders. "You will still be able to buy Guinness, my favourite pint." A rowdy crowd was having none of it. After the Guinness board showed a video designed to explain Diageo it was met with shouts of ``rubbish''. Shareholders expressed concerns about the cost of finding a new name. When Mr Greener revealed that the bill was in the region of pounds 250,000, one shareholder said: "That's childish. With all the brains on the board surely you could have easily invented a silly name like Diageo."
Not that the alternatives to Diageo were much better. The Independent can reveal some of the other names that Guinness and GrandMet considered for their new venture. It was close to choosing Carista, perhaps designed to conjure up images of a charismatic new food and drinks group. However, it had to give up the idea after it found that the name was already registered in several other countries around the world. It also rejected `Cordica' because it sounded too much like the name of Cordiant, the advertising agency.
However, the obvious distaste shown for Diageo the 400 or so Guinness shareholders who attended the meeting turned out to be nothing more than a side show. Mr Greener revealed that 97 per cent of shareholders who voted, backed the name change.
One Guinness shareholder raised concerns about the pounds 700,000 annual salary Mr Greener received on top of bonuses such as subsidised lunches. "Why don't you and the board limit your greed so we get more money," he said.
City sources also confirmed yesterday that the creation of Diageo was due to receive the green light from the US Federal Trade Commission next week. However, the group is expected to have to give up Dewar's, North America's leading whisky brand and several other spirits. Diageo shares will start trading on 17 December.