Seagram harbours doubts over Allied deal

Allied Domecq's hopes for a drinks merger with Seagram could be dashed because several senior executives at the Canadian drinks giant harbour grave doubts about the potential deal.

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.

Andrew Yates

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
Life and Style
tech

Apple has been hit by complaints about the 1.1GB download

Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
A 'Sir Alex Feguson' tattoo
football

PROMOTED VIDEO
Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Life and Style
Alexander McQueen A/W 2014
fashionPolitics aside, tartan is on-trend again this season
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Sport
Joel jumps over the board...and into a giant hole
footballFrom joy to despair in a matter of seconds
News
ebooksAn unforgettable anthology of contemporary reportage
News
i100
Arts and Entertainment
Pointless host Alexander Armstrong will voice Danger Mouse on CBBC
tv

Much-loved cartoon character returns - without Sir David Jason

Arts and Entertainment
Meera Syal was a member of the team that created Goodness Gracious Me
tv

Actress to appear in second series of the hugely popular crime drama

Arts and Entertainment
The former Doctor Who actor is to play a vicar is search of a wife
film

Matt Smith is set to join cast of the Jane Austen classic - with a twist

Life and Style
i100

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Property Underwriter

£70-90,000: Saxton Leigh: Our client a London Market Insurer are seeking a Pro...

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week