A messy old business The deal engineered by Diageo and Pernod Ricard to buy the Seagram drinks business is as complex as the auction process was messy. The two drinks companies have agreed to pay Vivendi Universal $8.15bn to acquire Seagram on a debt free basis, with Diageo stumping up $5bn and Pernod Ricard the remainder. Diageo is taking Crown Royal and VO Canadian whiskies, Captain Morgan rum, 7 Crown American whisky and the Sterling Vineyards wine business. It has also bought local brands Windsor Scotch in Korea, US premium rum Myers, and Cacique rum in Venezuela and Spain. In total, the brands being bought add up to 16.6 million cases and sales of just over $1bn a year. Should Diageo fail to win its looming court battle with Allied Domecq over the rights to Captain Morgan, Vivendi Universal will have to pay $1.8bn compensation. The main brands being bought by Pernod Ricard are Chivas Regal, Glen Grant, Royal Salute and Glenlivet whiskies as well as Martell cognac and Seagram's Extra Dry gin. It has acquired several leading national brands in Latin America, Asia and Europe, as well as Seagram's whisky manufacturing and bottling facilities in Scotland. These brands sell 14 million cases a year and generate sales worth $1.2bn. The Anglo-French team believes the way they have carved up Seagram will address any possible concerns of the antitrust authorities in Europe, the US and Canada ­ particularly over Scotch, where Diageo is already strong. They expect the deal to get the green light by the end of March. The companies have also set up a joint supervisory board, separate from their existing day to day management, which will be responsible for selling off unwanted brands. They reckon this process will take 12 months to complete and generate $670m. The proceeds will be split roughly 60:40 to match the amounts spent by each company on the acquisition ­ with Diageo taking $410m. {{NEWS }}