Diageo, Pernod Ricard working with commission to resolve issues
In a surprise move Tuesday, the Federal Trade Commission voted unanimously to block Vivendi Universal’s proposed $8 billion sale of its Seagram liquor business to Diageo and Pernod Ricard.
The FTC voted 5-0 to seek a court order preventing the sale on grounds that it would concentrate U.S. rum sales in the hands of Diageo and Bacardi, the market leader.
Vivendi U, Diageo and Pernod Ricard have been working with the FTC over the past 10 months to resolve any antitrust issues raised by the proposed sale; there had been no earlier indications that the sale was in jeopardy.
Vivendi Universal took the position that it was up to Diageo and Pernod Ricard to straighten things out with the FTC. In a statement, Vivendi U exec VP Edgar Bronfman Jr. said, “The question is not if the transaction will close, it is a matter of when — which in any case is no later than Dec. 31, 2001.”
A Diageo exec said further talks with the FTC will take place in coming weeks.
Vivendi Universal agreed to sell its liquor business to Diageo and Pernod-Ricard last December for $8.15 billion. The two liquor companies plan to divvy up Seagram’s major brands and sell off the rest.