The board of Allied Domecq PLC today announced that it has reached agreement on the terms of a recommended offer by Pernod Ricard S.A. to acquire Allied Domecq for $14.2 billion or 7.4 billion pounds.

“Competitive and economic conditions in the first half of 2005 have been tough but we delivered a robust performance driven by wine and Dunkin’ Brands. Against this backdrop the need for further consolidation in the distilled spirits industry is increasingly apparent, says Philip Bowman, Allied Domecq’s CEO. “The offer from Pernod Ricard provides Allied Domecq shareholders with the ability to crystallise value and an opportunity to continue to participate in the future success of many of our brands within the enlarged Pernod Ricard business. “

Under the basic terms of the offer, Allied Domecq shareholders will receive 545 pence in cash and 0.0158 of a New Pernod Ricard Share for every Allied Domecq share. Based on a Pernod Ricard share price of €116, the Offer values each Allied Domecq Share at 670 pence and the existing issued share capital of Allied Domecq at approximately £7.4 billion.

Conditional only upon the scheme becoming effective, Pernod Ricard has agreed to sell certain Allied Domecq assets including the Canadian Club, Courvoisier, Maker’s Mark and Sauza spirits brands, super-premium California wines, including the Clos du Bois brand, Allied Domecq distribution assets in the UK, Germany and Spain and for US wine, and Pernod Ricard’s Larios brand to Fortune Brands, Inc. for approximately £2.8 billion in cash.

Pernod Ricard will retain the rest of the Allied Domecq business, including many of the core spirits brands and premium wines such as Ballantine’s, Beefeater, Kahlúa, Malibu, Stolichnaya, Tia Maria, Montana, Mumm (and Mumm Cuvée Napa) and Perrier Jouët and Campo Viejo, together with Allied Domecq’s other business interests.

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