UPDATE: Sweden sells drinks business V&S to Pernod Ricard SA

Nordic Business Report, March 31, 2008

NORDIC BUSINESS REPORT-31 March 2008-UPDATE: Sweden sells drinks business V&S to Pernod Ricard SA(C)1994-2008 M2 COMMUNICATIONS LTD http://www.m2.com

(Adds comments from V&S in paragraph six)

The Swedish state confirmed on Monday (31 March) that it has agreed to sell the state-owned alcoholic beverages business V&S Vin & Sprit AB (V&S), including the Absolut Vodka brand, to the French group Pernod Ricard SA.

The sales price, including debt, amounts to SEK55bn, which will be paid in US dollars and euros.

Pernod Ricard has undertaken to continue V&S as a Swedish company.

In a separate statement Pernod Ricard said that the deal will make the combined group a "co-leader" in the global wine and spirits market. The acquisition is also expected to result in synergy gains of EUR125-150m.

Pernod Ricard's acquisition of V&S does not include V&S's 10% stake in the US company Beam Global Spirits & Wine Inc, which the Swedish state will sell to the main shareholder within the next few months.

V&S issued a brief statement on Monday welcoming the Swedish government's decision to sell the company to Pernod Ricard, saying that it sees "considerable industrial logic" in the deal.

V&S, headquartered in Stockholm, Sweden, is an international producer and distributor of wines and spirits, with production in the Nordic countries, Germany, Poland, the UK and the US Virgin Islands, and with sales in some 126 markets worldwide. The company's brands include Absolut Vodka and Cruzan Rum. V&S has some 2,100 employees and reported sales of SEK10.3bn in 2007.

One British pound (GBP) is worth approximately 11.85 Swedish kronor (SEK). One British pound (GBP) is worth approximately 1.26 euros (EUR).

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