Drinks giant Allied Domecq is to be taken over by the French owner of Chivas Regal whisky and Jacob's Creek wines for £7.4 billion, it has been announced.
Allied is recommending a cash-plus-shares deal with Pernod Ricard - a move that will create a company to challenge market leader Diageo. The deal involves Pernod selling a string of spirits brands such as Maker's Mark bourbon and Courvoisier cognac to US drinks group Fortune Brands for £2.8 billion.
Pernod said the deal made "compelling" financial and strategic sense as it creates the second-largest spirits and wines group in the world and will generate savings of 300 million euros (£204.7m) a year.
Pernod is acquiring many of the biggest brands in the drinks industry including Beefeater gin, Malibu, Tia Maria, Kahlua, Stolichnaya vodka and Ballantine's scotch. It will also retain premium wines such as Mumm, Montana and Perrier Jouet.
Bristol-based Allied, which has 13,000 staff worldwide, also owns Tia Maria and Courvoisier cognac and the food brands of Dunkin Donuts and Baskin-Robbins.
In addition to Courvoisier and Maker's Mark, Fortune will also take on brands such as Teacher's scotch, Harvey's Bristol Cream sherry and Cockburn's port - all of which have strong positions in the UK spirits market.
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