Diageo in tequila for Scotch swap

FRENCH group Pernod Ricard is to acquire Passport Scotch whisky for an undisclosed sum, buying out Diageo's share in the blended whisky brand. As part of the deal, Pernod will sell Diageo its Tequila Don Julio brand.

Passport Scotch and Tequila Don Julio were acquired jointly by Pernod and Diageo from Seagram's auction of drinks brands. Passport Scotch sells about 850,000 cases a year in markets including the US, Brazil and South Korea. It may be sold on to a third party once regulatory approval of the present transfer has been granted. Don Julio is sold mainly in Mexico. The deal leaves Pernod with three tequilas, Viuda de Romero, Olmesca and Margaritaville.

Diageo and Pernod completed the £5.7bn joint acquisition of Seagram from Vivendi Universal in February. The deal involved several trade-offs to satisfy US regulators. One of these was the £560m sale of Malibu coconut rum to Allied Domecq, in return for which Allied dropped an action threatening Pernod's control of the Seagram star brand, Captain Morgan rum.