Diageo has signalled that it may be willing to sell its Malibu rum brand in a desperate attempt to salvage its $8.15bn (£5.5bn) joint purchase of Seagram's wine and spirits business.
US anti-trust regulators blocked the deal on Tuesday evening because of concerns that it would stifle competition in the US rum market, creating a duopoly with Bacardi, the market leader.
Paul Walsh, Diageo's chief executive, has three weeks to rescue the deal before the US Federal Trade Commission files a formal complaint. "Everybody involved really wants this deal to go through and wants to make it happen," said a spokeswoman, adding that the company was considering divesting its Malibu coconut-flavoured white rum in an attempt to retain the jewel in the Seagram portfolio – its Captain Morgan rum.
Analysts said Diageo should relinquish Malibu to close the transaction, citing Allied Domecq, a rival drinks group, and Brown Foreman of the US as possible buyers. Malibu could fetch as much as £700m, analysts said.
Diageo shares fell 3p to 680p.Reuse content