Four bidders, led by Jim Beam bourbon maker Fortune Brands, have submitted binding offers for Sweden's Absolut vodka maker Vin & Sprit in a $6 billion-plus auction, sources close to the auction said.
The U.S.-based Fortune is joined by three others bidders, France's Pernod Ricard, Bermuda-based privately-owned Bacardi and Swedish private equity group EQT which is working with investment firm Investor, the sources added.
"All four have submitted bids and we would expect a winner to be picked in around three weeks time," said one source close to the process on Thursday.
Sweden's government allowed the four prospective bidders to perform due diligence back in February on the state-owned Absolut vodka maker. This allowed them to scrutinise Vin & Sprit's financial details before finalising any binding offers.
Fortune is smaller than the other two spirits groups, Pernod and Bacardi, but its 10-year distribution deal in the key U.S. vodka market for Absolut, which runs to 2012, has made it favourite to win and makes bids from its rivals more difficult.
Absolut is the jewel in V&S's crown selling 10.7 million 12-bottle cases in 2007, making it the world's number four best selling international spirit brand behind Diageo's Smirnoff vodka, Bacardi rum and Diageo's Johnnie Walker scotch. Around half of Absolut's volume is sold in the U.S.
Fortune, which is the world's fourth largest spirits group after Diageo, Pernod and Bacardi, has teamed up with private equity group Nordic Capital, with Fortune planning to keep Absolut while Nordic will take on V&S's smaller spirits brands and its wine interests, sources said.
Pernod is keen to buy a leading vodka to fill a hole in its drinks portfolio, but is keeping its options open by talking to the Russian authorities about buying the rights to Stolichnaya outside Russia where it already distributes the brand.
Bacardi is confident its super premium Grey Goose vodka is upmarket enough compared to premium Absolut for U.S. regulators not to block a deal, but it is likely to have to sell off V&S's Cruzan rum as it already owns its flagship Bacardi rum.
The Investor and EQT team would give a Swedish solution and although it would not offer the cost savings that the big spirit groups could, it hopes to gain an edge by offering the Swedish government any profits resulting from any subsequent sale or stock market listing, the sources said.