Pernod Gets Absolut

Swedish distiller fetches $9 billion.

French distiller Pernod Ricard SA announced on Monday that it's buying Vin & Sprit, the Swedish maker of Absolut, for about $9 billion.

Pernod, the marketer of Seagram’s gin, Chivas Regal Scotch Whisky and Jameson Irish Whiskey, said the iconic vodka brand fills a hole in its portfolio.

From the Wall Street Journal:

Pernod Chief Financial officer Emmanuel Babeau said that Absolut was the "best asset" to fill the gap in Pernod Ricard's premium vodka-product line. He said the acquisition will significantly strengthen the company's growth profile.

Pernod beat out other bidders, including Fortune Brands (the marketer of Jim Beam), Bacardi and a Swedish private-equity firm.

Many observers had pegged Fortune as the bidder to beat because it already distributed Absolut in the U.S. But the Wall Street Journal -- which broke the story -- suggests that Fortune’s ability to bid may have been hurt by weakness in the housing market. Fortune, a conglomerate, makes construction equipment including faucets.

Fortune said the price was too steep:

Fortune Brands Chief Executive Bruce Carbonari said he had hoped the company could buy Absolut "at the right price" but that shareholder interests came first.

"We didn't see the appropriate return for our shareholders at the announced price, so we preserved our financial flexibility to create significant value in other ways," he said in a statement.

Fortune is now buying back shares as well as an equity stake in its spirits business that's held by V&S.

Fortune also said it will continue to distribute Absolut in the U.S. until 2012, under terms of its current joint venture.

The Wall Street Journal story can be seen here.

CNNMoney's coverage of Fortune can be seen here.