Diageo, Pernod Close to Buying Seagram

Britain’s Diageo and France’s Pernod Ricard are close to agreeing to buy Vivendi Universal’s Seagram unit for about $8.2 billion in cash, topping a rival bid for the third-biggest liquor company, people familiar with the matter said. The Diageo-Pernod group beat an offer of about $8 billion from Bacardi Ltd. and Brown-Forman Corp., sources said. Vivendi could announce the sale as early as today. The purchase would be the biggest in the industry since Grand Metropolitan bought Guinness for $39 billion to form Diageo, the biggest maker of wine and spirits, in 1997. Seagram offers brands, such as Captain Morgan rum, that are expanding at double-digit rates in an industry with little overall growth. Absorbing Seagram will be complicated by the buyers’ need to divide its businesses. Allied Domecq quit the auction last week, deciding to buy individual brands rather than take on almost 200 products. Vivendi wants to focus on media and has said it expects to use the proceeds to pay debt from its $41.4-billion acquisition of Seagram, parent of Universal Studios, earlier this year.