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Tuesday, 12 December, 2000, 14:38 GMT
Seagram's drink race nears end
Drinks and glasses
Last orders: Bidding for Seagram's drinks portfolio closed on Monday
The alliance between UK drinks firm Diageo and France's Pernod-Ricard is emerging as favourite to win the long-drawn-out auction for Seagram's wines and spirits business.

Analysts believe the level of cash reserve the two firms can muster puts them in pole position to win the drinks arm, which Canadian-based Seagram is selling to focus on the media sector.

Industry sources said the value of the winning was likely to be in the range of $8bn-8.5bn. Analysts had earlier estimated a sale would fetch at least $7bn.

"We have at this time two very competitive proposals for the sale of our spirit and wine business," a Vivendi spokesman said on Tuesday, one day after bidding closed. "We are confident that the process is on the right track and a definitive agreement will be signed before the end of the year."

Bacardi and Brown-Forman was thought to be the second bidder for the Seagram portfolio, which includes brands such as Captain Morgan rum, Chivas Regal whisky and Martell cognac.

UK-based Allied Domecq, the world's second ranking drinks firm, had also been interested in buying Seagram. It declined comment on Tuesday on whether it had submitted a bid but industry sources said they believed it had not.

'Deal of a lifetime'

A source said: "This is the deal of a lifetime in the drinks world and Diageo and Pernod appear to have been working very confidently towards victory."

Seagram is selling its drinks empire to concentrate on its entertainment holdings, including Universal Pictures, and a merger with French-based Vivendi cleared by regulators in October.

Shares in the merged company, named Vivendi Universal closed 1.20 euros lower at 74.00 euros in Paris on Monday, their first day of trading.

Diageo, which includes Guinness, Johnnie Walker and Smirnoff in its portfolio, is believed to be particularly interested in acquiring Captain Morgan rum and Seagram's California wines business.

Pernod-Ricard is thought to want the Chivas Regal and Glenlivet whisky brands.

Insiders said the winning bidder might be chosen as early as Friday, although 18 December looked a more likely date.

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See also:

30 Oct 00 | Business
Watchdogs clear $24bn media merger
13 Oct 00 | Business
EU clears Vivendi-Seagram merger
18 Aug 00 | Business
Drinks firms mix for takeover bid
04 Jul 00 | Business
Rum row turns sour
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