Seagram harbours doubts over Allied deal
Thursday 29 January 1998
A complete merger of the two group's spirits businesses is still the preferred option for Allied, which sees Seagram as its most logical partner as it strives to forge a new drinks giant to take on the might of Diageo.
Although a merger may still be on the cards, some members of the Seagram camp are understood to be unhappy about giving up control of the spirits business.
One alternative under consideration is a distribution agreement with Seagram. One industry source said: "Allied's spirits merger with Seagram is meeting with some resistance. That does not mean it will not happen but Allied may have to make do with a distribution agreement instead, probably on a country-by-country basis."
Such a move would not generate the sort of cost savings that would result from a full merger, but could lead to substantial benefits for both sides.
Allied is considering involving Bacardi-Martini, the US drinks group, in a distribution deal if it agrees a tie-up with Seagram, according to another source. Together the three drinks groups could provide a real competitive threat to Diageo.
"Everybody wants Bacardi. It is the biggest selling brand in the world and would be an ideal partner for Allied and Seagram," said one drinks analyst.
Allied is also in talks with other drinks giants around the world about a potential merger. However, like Seagram, which is run by the Bronfman clan, most of the biggest groups are family owned, which can complicate negotiations.
If Allied and Seagram do manage to thrash out a deal it would give the combined group huge clout in the worldwide spirits market.
Allied owns Teachers and Ballantine's whisky, Courvoisier cognac and Beefeater gin, which fits well with Seagram's Chivas Regal whisky, Martell cognac and Mumm champagne.
Talks with Seagram are understood to have progressed further than initial discussions. However, sources suggest Allied is still some way from sealing an agreement and a final deal could be months away.
Allied and Seagram have already ruled out a full merger. Seagram is not interested in acquiring Allied's pub and retail interests.
The group is also keen to keep control of its entertainment division, which owns Universal Studios in Hollywood. Goldman Sachs, the US investment bank, is advising Allied on its options.
Apple has been hit by complaints about the 1.1GB download
Liam Neeson's Downton dreams
Thriller is set in the secret world of British espionage
Bomber jacket worn by Mary Berry sells out within an hour
Much-loved cartoon character returns - without Sir David Jason
Actress to appear in second series of the hugely popular crime drama
Matt Smith is set to join cast of the Jane Austen classic - with a twist
- 2 Scottish independence: Five reasons Salmond is secretly hoping for a 'No' vote
- 3 Isis plan to 'behead random member of the public' in Sydney thwarted by Australian police
- 4 Scottish independence: Andy Murray backs Yes campaign in eleventh hour decision
- 5 Have you heard about the film Singapore has banned its people from watching? Well, you have now
Thailand beach murders: Thai PM suggests 'attractive' female tourists cannot expect to be safe wearing bikinis
Scottish independence referendum live: Latest news as Scotland decides Yes or No
Scottish independence: Final opinion polls show undecided voters could swing result either way
Scottish independence: Almost half of No voters have felt 'personally threatened' by the Yes campaign
Isis plan to 'behead random member of the public' in Sydney thwarted by Australian police
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Portuguese academic says British are 'filthy, violent and drunk'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
iJobs Money & Business
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£70-90,000: Saxton Leigh: Our client a London Market Insurer are seeking a Pro...
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...