Pernod buys Lillet, affirms Absolut interest

By Noelle Mennella

PARIS (Reuters) - French wines and spirits group Pernod Ricard (PERP.PA) said on Thursday it would acquire small French aperitif maker Lillet and reaffirmed its interest in Absolut vodka despite the continuing turbulence in credit markets.

"We have agreed with the Borie family to buy Lillet. We are buying 100 percent of the brand. The transaction should close in the coming weeks," Pernod Ricard Chief Financial Officer Emmanuel Babeau told Reuters.

Asked about the deal's price, he said: "It's more millions than tens of millions of euros. In the context of the Pernod Ricard group, it's not very significant."

Separately, Babeau said Pernod Ricard lacked visibility on final consumer demand in the United States, after sales to distributors suffered in the second half of calendar 2007.

He said, however, the group expected continued "solid growth" in the United States thanks to its premium brands and saw no signs of slowdown in Asia and Europe.

Lillet makes an aperitif that is already distributed by Ricard. In 2006 it had sales of around 3.7 million euros for a net result of around 200,000 euros.

Separately, Babeau reaffirmed Pernod Ricard's interest in buying the much larger Vin & Sprit, the maker of Absolut vodka, which has been put up for sale by Sweden's government as part of a multi-billion-euro privatization program.

Meanwhile, talks with Russia about acquiring full rights to the Stolichnaya brand were continuing, he said.

"I confirm that we are still in talks about Stolichnaya and as far as Absolut is concerned we are involved in the sale process initiated by the Swedish government. We are working on both because one or the other brand interests us," he said.

He declined to comment on Pernod Ricard's estimate of how much either brand would cost it.

Other groups lining up for Vin & Sprit include Fortune Brands (FO.N), Diageo (DGE.L), privately held Bacardi and a group of Swedish investors.

Asked whether the macroeconomic environment and ongoing turbulence in financial markets could lead to a modification of Pernod's acquisition strategy, he said:

"We look permanently at the different brands ... in light of the markets. But today there is no collapse in the market so there's no need to dramatize the situation," he said.

(Editing by Quentin Bryar)