Pernod pays Fortune for US distribution of Absolut

Pernod Ricard has paid Fortune Brands $230 million (£126 million) to end a joint venture to distribute Absolut vodka in the U.S.

The deal means that Pernod Ricard now takes full control of the distribution of Absolut in what is considered a key market.

Pernod announced earlier this year that it had won the bid to acquire Absolut's parent company, Vin & Spirit (V&S). The distribution agreement for V&S brands by Future Brands, a joint venture company between V&S and Fortune Brands, was originally scheduled to end in February 2012, meaning the takeover by Pernod has happened three and a half years earlier than anticipated.

Commenting on the agreement, Patrick Ricard, CEO and chairman of Pernod Ricard, said: "The immediate takeover of Absolut distribution in the US by Pernod Ricard USA is excellent news for the Group. We will now market and distribute the leading imported spirit and Premium vodka in the U.S, which greatly enhances our position.

"Through both our size and the quality of our portfolio, we are now the clear number two in the North American spirits market. These factors will allow us to strengthen our growth in this key market."

Separately, and as part of the announced disposal plan, Pernod Ricard will sell the Cruzan rum brand and related assets to Fortune Brands for $100 million (£55 million). Cruzan had been acquired in 2005 by V&S and has since become a fast growing brand, reaching more than 750,000 9 litre cases in 2007 and a close to break even contribution after advertising and promotion costs.

Pernod Ricard will take full control of the distribution of Absolut from October 1.

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