Fortune Brands (FO) Receives $230M Payment from Pernod Ricard; Will Acquire Cruzan Rum Brand for $100M

August 28, 2008 4:52 PM EDT

Fortune Brands, Inc. (NYSE: FO) and Pernod Ricard today announced an agreement under which Fortune Brands will receive compensation in exchange for early termination of the company's distribution agreement with Pernod Ricard's ABSOLUT vodka and other brands.

Under the agreement, Pernod Ricard will pay Fortune Brands $230 million in pre-tax proceeds, and Fortune Brands will pay $100 million to Pernod to acquire the premium Cruzan Rum brand. The agreement will result in the termination as of October 1st of the U.S. distribution agreement between Fortune Brands' Beam Global Spirits & Wine business and the U.S. business of V&S Group recently acquired by Pernod.

The company estimates it will recognize a net gain amounting to $1.18 per diluted share in its Q3 results, reflecting the cash payment from Pernod Ricard plus the remaining unamortized gain from V&S's initial investment in the joint venture, as well as modest restructuring charges to realign the sales organization.

Fortune Brands, Inc., through its subsidiaries, engages in the manufacture, production, and sale of spirits, home and hardware products, and golf products.

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