Pernod to sell businesses to private equity groups

Several private equity firms are in advanced talks with Pernod Ricard about buying two of its non-core assets.

Pernod Ricard, the world's fifth largest wines and spirits company, with more than 80 brands, is in advanced talks with private equity firms Electra Partners and ABN Amro Capital Partners to sell its wholesale distribution subsidiary, BWG, the UK and Irish wholesale grocery business. The two firms have reached the final shortlist in the auction for the proposed management buyout for the business that has a turnover of circa. E3bn.

Commenting on the BWG deal an Electra spokesperson said: “We think it is an interesting opportunity. We are still at the stage of making an assessment of the business.” A decision as to who will acquire the company is expected to be announced in the next few weeks.

Pernod appointed Schroders Salomon Smith Barney to start the auction for BWG several months ago following its decision to concentrate on its core assets within the wine and spirits sectors. Alain-Serge Delitte of Pernod said the sales of its non-core assets would help finance its part of the joint $8.5bn acquisition of the Seagram spirits and wine business from Vivendi Universal which it is undertaking with Diageo. Pernod is set to pay around $3.15bn for selected assets in this transaction which is awaiting regulatory approval.

Pernod Ricard is also in advanced and exclusive talks with Butler Capital Partners, the Paris-based private equity firm, over the sale of its SIAS fruit processing business, which is expected to be valued at about E180-250m, including debt. Turnover for SIAS is in the region of Fr1.7bn.

Finally, the drinks firm is also in advanced stages with Cadbury Schweppes for the sale of its Orangina brand for Fr4.7bn and is in early stage talks with another undisclosed buyer as it looks to offload its cider division, CSR.