Pernod Ricard wins Absolut race

Absolut is the world's fourth-largest selling spirit.

French alcohol giant Pernod Ricard is to buy Vin & Sprit, maker of Absolut vodka, from the Swedish government.

The 55bn kronor ($9.24bn; £4.6bn) deal follows months of speculation over who would buy the state-owned firm and the world's second largest vodka label.

The government, which is selling the label as part of privatisation push - said that Absolut would stay in Sweden.

Diageo was a contender, but last month agreed to form a joint venture with the makers of Dutch vodka brand Ketel One.

Another potential suitor had been Bacardi, which got a foothold in the premium vodka market in 2004, buying the Grey Goose label.

'World leader'

With a turnover of about 1bn euros ($1.3bn; £680m), Vin & Sprit employs 2,500 people in 10 countries.

Absolut is an iconic brand whose importance goes beyond the world of wines and spirits Pernod Ricard

Absolut is the fourth biggest international spirit behind Smirnoff vodka, Bacardi rum and Johnnie Walker scotch.

Analysts said that outside of the US - where about half of all Absolut is sold - the brand still carried the cache of being a premium vodka.

Pernod Ricard said the deal would bring it savings of between 125m and 150m euros per year.

"With the acquisition of V&S, Pernod Ricard becomes the world's co-leader in the wine and spirit industry," the French firm said.

"Absolut is an iconic brand whose importance goes beyond the world of wines and spirits."