Princes Group Regulatory News (PRN)

19 Oct 2005 17:30

Diageo PLC19 October 2005 19 October 2005 Diageo decides not to exercise its option to acquire the Montana wine business Diageo has informed Pernod Ricard that it has decided not to exercise the optionto purchase the Montana wine business. In June 2005 Pernod Ricard granted Diageo an exclusive option to purchasecertain assets within the Montana wine business including the Montana brand andassociated assets. At the time the option was granted, Allied Domecq, which wassubsequently acquired by Pernod Ricard in July 2005, owned the Montana business.The option gave Diageo the opportunity to determine whether the acquisition ofMontana could achieve appropriate growth and returns for shareholders. The option was granted over the Montana wine business with the exception of theCorban's, Stoneleigh and Church Road brands. Diageo has now completed a detailedreview of this business and the prospects for export led growth together withmargin improvement from premiumisation and innovation. However, the acquisitionwould not meet Diageo's investment criteria. Paul Walsh, CEO of Diageo commented: 'Diageo gained the option over the Montana wine assets as a result of Pernod'sacquisition of Allied Domecq. We have now examined the opportunities that theMontana business presents and we have concluded that it does not fit ourinvestment criteria and have decided not to proceed. 'We recognize that wine is a growing category and that our scale can deliver topand bottom line synergy benefits for wine acquisitions. We will add selectivelyto our wine business, especially within the premium segment, as we have donewith our recent Chalone acquisition. ' -Ends- Contacts: Investor Relations: Catherine James +44 (0)207 927 5272 investor.relations@diageo.com Media Relations: Isabelle Thomas +44(0)207 927 5967 media@diageo.com Notes to Editor: Diageo is the world's leading premium drinks business. With its global vision,and local marketing focus, Diageo brings to consumers an outstanding collectionof beverage alcohol brands across the spirits, wine and beer categoriesincluding Smirnoff, Guinness, Johnnie Walker, Baileys, J&B, Cuervo, CaptainMorgan and Tanqueray, and Beaulieu Vineyard and Sterling Vineyards wines. Diageotrades in some 180 countries around the world and is listed on both the New YorkStock Exchange (DEO) and the London Stock Exchange (DGE). For more informationabout Diageo, its people, brands and performance, visit us at www.diageo.com This information is provided by RNS The company news service from the London Stock Exchange