Pernod Ricard Seeks Nod To Acquire Seagram India

French liquor major Pernod Ricard has sought government permission to acquire the businesses of Seagram International in India. This follows the global acquisition of the latter's spirits and wine business by Diageo-Pernod Ricard SA combine last year.

As per the deal, Pernod Ricard SA, Peri Mauritius and other subsidiaries or affiliate firms, will acquire 45,021,028 equity shares of Rs 10 each (equity capital worth Rs 45.02 crore) and 250,000 preference shares of Rs 1,000 each (preference shares worth Rs 25 crore) held by The Netherlands-based Seagram International BV and Winery Chateau Investments (WCI) BV in Seagram India.

The authorised share capital of Seagram India is Rs 100 crore, divided into 7,50,00,000 equity shares of Rs 10 each (Rs 75 crore) and 250,000 redeemable preference shares of Rs 1,000 each (Rs 25 crore).

 

Subject to government approval, Seagram India Ltd will, thereby, become a wholly-owned subsidiary of Pernod Ricard group, said sources.

Pernod Ricard also has a 74 per cent subsidiary in India -- The United Agencies Ltd (Pernod Ricard India). Pernod Ricard's investments routed through Peri Mauritius amounts to Rs 21.3 crore out of the JV's paid up capital of Rs 28.7 crore.

It is still unclear whether Seagram India will be merged with Pernod Ricard India to form a larger liquor company or vice versa and Seagram India will be allowed to run as an independent company due to the wider acceptability of the 'Seagram' brand in India.

According to sources, since the global merger, Pernod Ricard has been working with skeletal staff in India and Seagram India chief executive Param Uberoi is tipped to take over the merged entity, if the merger takes place at all.

Seagram India's product portfolio includes Royal Stag, 100 Pipers, Something Special, Imperial Blue, Blender's Pride (all whiskey brands) and Seagram's Extra Dry Gin. It also imports and sells Chivas Regal scotch.

Pernod Ricard, on the other hand, sells only Tilsbury rum in India. The acquisition of Seagram India business will, therefore, extend the French liquor firm's business profile in India to the whiskey and gin segments.

Both Seagram and Pernod Ricard originally had received government permission to manufacture and distribution of alcoholic products and manufacture and processing of fruit-based products and fruit juices. Seagram's fruit juice business was taken over by Pepsi which sells the Tropicana fruit juices through another subsidiary.

Pernod Ricard's worldwide non-alcoholic drinks portfolio includes several fruit juice brands and the Yoo-Hoo chocolate drink.

Diageo's Indian arm UDV will, however, remain an independent entity, though in the division of brands worldwide, UDV has got Captain Morgan rum, Crown Royal and VO Canadian whiskies, 7 Crown American whiskey and the Sterling Vineyards wine business from the Seagram's drinks portfolio.

Pernod Ricard's proposal has been sent to the Foreign Investment Promotion Board (FIPB) which will consider the case shortly. The government has recently cleared the cases of South African Breweries and Foster's of Australia.

According to sources, resident shareholders in United Agencies Ltd -- Mumbai-based Highgrade Securities Pvt Ltd, AK Ruia, SG Ruparel -- have filed their no-objection certificates with the FIPB. So have Seagram International Ltd and Winery Chateau Investments.