Diageo walks away from Montana purchase

Leading global alcohol drinks firm Diageo has decided not to exercise its option to buy the Montana wine business from Pernod Ricard.

In June this year Pernod Ricard gave Diageo an exclusive option to buy Montana for around £320 million ($814 million). At the time Diageo was supporting Pernod Ricard in its attempt to takeover Allied Domecq, which then owned Montana.

The option was for the Montana wine business with the exception of the Corban's, Stoneleigh and Church Road brands.

Under the same deal, Pernod sold Diageo its Bushmills Irish whiskey for £200 million.

Pernod Ricard paid 10.7 billion euro ($18.65 billion) for Allied Domecq, becoming the world's second-largest beverage maker after Diageo.

Diageo chief executive Paul Walsh said last night (NZT) Diageo has completed a detailed review of Montana and its prospects, but decided the acquisition would not meet its investment criteria.

Diageo owns Smirnoff vodka, Guinness beer and a California wine business.

- NZPA