Seagram clearance expected by mid-December

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The two bidders for Seagram's drinks business, Diageo and Pernod Ricard, are confident the deal will finally be cleared by mid-December. The US Federal Trade Commission (FTC) blocked the sale in October, fearing that Diageo's acquisition of Captain Morgan would create a rum duopoly in the US between Diageo and Bacardi-Martini. But industry sources suggest that the FTC will approve the deal early next month following Diageo's offer to sell its coconut rum brand Malibu within six months.

Pernod Ricard has already confirmed it will study the possibility of acquiring Malibu to speed up the completion of the Seagram deal. Other likely contenders include Brown-Forman and Jim Beam owner Fortune Brands. Diageo's closest rival Allied Domecq may also be interested in taking on Malibu, in which case the company will almost certainly drop its claim to Captain Morgan, now being pursued in the Puerto Rican courts. Allied signed an agreement with Captain Morgan producer Destileria Serralles last year before dropping out of the Seagram auction.

• Further updates will appear on TRW and in Duty-Free News International.