Allied Domecq deal gets regulatory backing

Drinks giant Allied Domecq was today closer to being swallowed by rival Pernod Ricard after regulators in the United States gave the deal the green light.

Pernod needed approval of the US Federal Trade Commission and the Department of Justice for its £7.4bn (€10.9bn) takeover offer because it will carve up Allied’s drinks portfolio with American partner Fortune Brands.

It comes less than 24 hours after Pernod won the backing of its own shareholders for the takeover and means Allied investors will now decide the fate of the deal when they meet on Monday.

Analysts are expecting little opposition to the deal among major shareholders and shares in Allied became the top riser on the FTSE 100 Index this morning in anticipation of a successful outcome.

The takeover involves Jim Beam bourbon owner Fortune acquiring Courvoiser cognac and historic whisky brands such as Teacher’s and Laphroaig from Pernod.

The US agencies gave early clearance for this part of the deal although the Federal Trade Commission is continuing its review of the sale of the Canadian Club and Maker’s Mark brands to Fortune.

Patrick Ricard, chairman and chief executive of Pernod, welcomed support for the deal in the US which followed its clearance by the European Commission last week.

He said: “We now look forward to the outcome of the Allied Domecq shareholder meetings on Monday and believe that we remain firmly on track for meeting the proposed timetable with completion occurring by the end of July.”

Pernod was given a clear run at Allied last month when US-based Constellation Brands pulled out of takeover talks on the grounds that a deal would not create “sufficient value”.