The hunt for Russia's Stoli

27 June, 2008

Russian vodka Stolichnaya looks set to become the subject of a multi-billion-pound bidding war between the world's leading spirits companies.

SPI, the brand's Russian owner, has hired investment bank Lehman Brothers to explore options that could lead to the sale of the brand and distribution rights.

Analysts believe that SPI could raise as much as 1.5 billion if Stolichnaya went up for auction.

The brand's long-term health depends on finding new distribution internationally, as Pernod Ricard will relinquish its international rights to market the brand once it completes its acquisition of Absolut.

Competition considerations rule Pernod out of a deal to buy Stoli and Diageo has effectively ruled itself out of further vodka acquisitions after taking on Ketel One, leaving the also-rans on the Absolut takeover race as favourites to bid for the Russian brand.

Bacardi-Martin, Campari and Brown-Forman are being tipped as possible suitors.

Stolichnaya was the subject of a high profile relaunch last year, refocusing the brand on its Soviet-era Russian heritage.

The UK is Stoli's the third biggest export market

behind the US and Greece. Annual sales are around 100,000 cases.




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