Yesterday Constellation Brands announced that the consortium, which includes Constellation, Brown-Forman, Lion Capital and The Blackstone Group, has decided not to pursue an offer for Allied Domecq.

This means that Pernod Ricard has won the bidding war for the company. It looks like they will be getting it for about $13.7 billion. Constellation’s consortium had planned to offer about $18.2 billion, but decided against it after consideration following due diligence.

Constellation Brands Chairman and CEO Richard Sands, stated, “Constellation approached this opportunity in a disciplined strategic and financial manner and does not believe that the economics justify an offer. Our basic premise is always that a transaction must create value for our stakeholders. Simply put, careful consideration and evaluation of the details following due diligence did not identify sufficient value for submitting an offer.” According to CNN Money,

Shares in Pernod initially jumped more than 5 percent on the overnight news, as the company will not have to raise its bid to secure Allied (up $0.19 to $50.43, Research). The acquisition will create the world’s second-largest drinks group behind market giant Diageo (up $0.02 to $59.18, Research).

Allied shares were off nearly 2 percent at 678-1/2 pence in morning trading, while Pernod shares, which rose 5.7 percent at the opening in Paris, were up 234 percent at 135.50.

“Constellation greatly appreciates the strong support we have received from our shareholders and consortium partners throughout this process,” continued Sands. “We continue to believe that there are additional opportunities to complement growth of our base business with strategic acquisitions in our industry, and we will remain a determined and disciplined buyer.”

Brown-Forman Chairman and CEO, Owsley Brown II said, “We were excited about the prospect of owning some of Allied Domecq’s premium brands and are disappointed that the consortium is unable to proceed. We are very cognizant, however, of the great efforts put forth by each of the consortium partners and are respectful of the decision reached by Constellation Brands.
“Brown-Forman has just completed its most successful year in recent history and we remain optimistic about our many prospects for growth,” stated Brown.

Pernod Ricard has plans to sell some of Allied Domecq’s brands to Jim Beam maker Fortune Brands, and to British company Diageo. Constellation says it has other acquisition opportunities for the future.

Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.