SAN FRANCISCO - US drinks firm Constellation Brands and its partners yesterday dropped plans to bid for Britain's Allied Domecq, leaving the field clear for a US$13.7 billion ($19.4 billion) offer from France's Pernod Ricard.
Constellation Brands, owner of Mondavi and BRL Hardy wines and the world's biggest wine group,
considered for weeks a possible counterbid to that of the French spirits maker.
Pernod Ricard plans to sell some Allied brands on to Fortune Brands, maker of Jim Beam bourbon, and to Britain's Diageo. Allied owns Montana NZ in New Zealand.
"Simply put, careful consideration and evaluation of the details following due diligence did not identify sufficient value for submitting an offer," said Constellation Brands chairman and chief executive Richard Sands.
He said Constellation, based in Fairport, New York, continued to believe there were acquisition opportunities to add to future growth.
Constellation, with its partner, Jack Daniel's maker Brown-Forman, and private equity groups Lion Capital and Blackstone Group, had until June 29 to come up with a bid.
The deadline was set by Britain's Takeover Panel.
Pernod agreed to take over Allied in late April, in a cash and stock deal. It strengthened its hand recently by bringing Britain's Diageo in as another partner. Diageo will buy Allied's New Zealand Montana wines business.
The European Commission cleared Fortune's proposed acquisition of assets, slated for after completion of the Pernod bid, on June 10. However, the takeover itself still awaits clearance by the commission and by US regulators.
- REUTERS
