ALLIED BUYS BEBIDAS

Published: 23 July, 2008

Allied Domecq is buying Bodegas y Bebidas, the largest exporter of Spanish quality wine, with brands such as Campo Viejo, Siglo and Via Alcorta. Allied's Plc has filed a recommended conditional cash offer of e279 million (174 million) for Bebidas, which is based in Rioja, owning 480ha of vineyards and producing wine from nine DOs. It sold 6.4 million cases of wine in Spain and exported 1.3 million cases to the year ending December 2000. Allied already has "irrevocable undertakings" for 52.5% of Bebidas' share capital. Allied's existing Spanish wine business, Bodegas Domecq, is also based in Rioja and has two key brands, Marqus de Arienzo and Via Egua. Allied has also recently bought Kuemmerling, the hitherto family-owned company which owns Germany's fourth largest spirits brand. Allied paid 128 million for the company, which sold 680,000 cases of the Kuemmerling brand in the year to 31 December 2000. "The acquisition represents a significant addition to our existing operations in Germany, Europe's largest spirits market, where Allied Domecq will now rank fourth largest in the spirits market," said Allied's chief executive, Philip Bowman. The bitters category accounts for approximately 10.5% of the German spirits market by volume, and 14.4% by value. The category has grown despite a decline in the total spirits sector. Kuemmerling is a half bitter, and is second in the bitters market. The deal gives Allied a presence in an otherwise difficult regional and parochial market. This spate of acquisitions follows the purchase of Montana, California's Buena Vista winery, the Argentinian wines Graffigna and Sainte Sylvie, as well as Perrier Jout and Mumm Champagnes. l Allied chief executive Philip Bowman has been in Australia and New Zealand this week, meeting the financial media and visiting Montana. The visit has fuelled speculation that Bowman is eyeing up other potential Antipodean purchases.

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