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Pernod Ricard submits first offer for Vin & Sprit's Absolut

Published:  23 July, 2008

Bidding has begun for Sweden's state-owned Vin & Sprit AB, the owner of Absolut vodka, and Pernod Ricard has submitted a nonbinding offer at the end of the first round, according to a report in the Wall Street Journal.

The report said the Swedish Government closed the first round of bids on Thursday.

Two Swedish companies, private-equity firm EQT Partners AB and Investor AB, the main investment vehicle of Sweden's Wallenberg family, also made a joint offer, according to the report.

Absolut is the world's third-largest premium liquor in terms of volume, after Diageo's Smirnoff vodka and Bacardi rum, and could be valued at around US$5-6billion, analysts predict.

It fits perfectly with Pernod Ricard's strategy to position its current top 15 brands in the luxury sector.

The Swedish Government said it will hold a second round of bidding in about six weeks, with completion expected within six months.

Meanwhile, Pernod Ricard confirmed it was in talks with Russia's SPI Group to buy the premium vodka brand, Stolichnaya.

The French firm currently owns the distribution rights outside of Russia, but not the brand.

Pernod's director general, Pierre Pringuet, told a press conference: "We cannot buy both Stolichnaya and Absolut but we must win one."

The company reported "historic growth" on Thursday. Its interim net sales hit 3,713 million (2,775m).

It now aims for 2007/08 growth in operating profit from ordinary activities, on a like-for-like basis, of about +12%.