Brussels, 10/05/2001 (Agence Europe) - The European Commission has authorised the French company, Pernod Ricard SA, and British-based Diageo Plc to acquire from Vivendi Universal SA the world-wide spirits and wine business of the Seagram Company Ltd. According to a framework agreement between the acquiring parties, the most important brands and assets of Seagram will be divided between Pernod Ricard and Diageo while a number of other brands and assets will be sold to third parties within a defined time period. The Commission's approval is subject to compliance with the agreement, to the sale of Bourbon's Four Roses brand to a third party and to the separation of the distribution of the Captain Morgan rum brand in Iceland from the distribution of other Diageo brands there.
The seagram Spirits and Wines Group is the owner of a number of leading spirits brands (Chivas Regal, Glenlivet, Bourbon Four Roses, Martell cognac, Captain Morgan rum), as is Pernod Ricard (Clan Campbell scotch, Bisquit brandy, Ricard) and Diageo (Johnnie Walker scotch, Smirnoff vodka, Baileys, Gordon gin). The operation is the result of a joint offer by Pernod Ricard and Diageo for the acquisition of the world-wide Seagram Company Ltd wines and spirits business. The commercial rational of the transaction is to enable each of the notifying parties to acquire and retain certain parts of Seagram for integration into their respective businesses. The remaining shares of Seagram will be sold to third parties within a fixed time period. The parties' intentions as to the destination of each brand are set out in the Framework Agreement.
During examination of the transaction, the Commission noted, that, in Iceland, the addition of the Captain Morgan brand of rum, which dominates the local market already, to the already strong position held by Diageo might give rise to competition problems. Also, the acquisition, either by Diageo or by Pernod Ricard, of the Four Roses bourbon brand name could also cause competition problems on several national markets. To eliminate such problems, the parties pledged to separate the distribution of the Captain Morgan brand in Iceland from the distribution of other Diageo brands and to sell the Four Roses brand to third parties. The also undertook to respect the framework agreement and to set in place specific safeguards and firewall measures and procedures to avoid any potential competition concerns during the allocation of assets and their management during the transition period. An independent trustee will be appointed to monitor the allocation of the Seagram brands and the operation of the firewalls. The Commission concluded that the commitments taken by the parties were sufficient to resolve the competition concerns identified during its investigation. It limited its examination, carried out in close cooperation with the EFTA Surveillance Authority, to the impact of the joint acquisition within the European Economic Area. The case is also being examined by the US Federal Trade Commission.