Drinks giant Diageo yesterday backed the £7.4 billion takeover of Allied Domecq by French rival Pernod Ricard after being allowed to cherry-pick key brands.
Diageo revealed it was paying £200 million for Bushmills - the second biggest brand of Irish whiskey - on condition Pernod successfully lands control of Allied.
At the same time, the group has also secured an exclusive option to buy most of the Montana wine business off Allied for approximately £320 million.
The deal between Diageo and Pernod is a blow to the hopes of a consortium led by US- based Constellation Brands of landing Allied.
Diageo had previously said it was willing to support either bid if certain brands became available, but has now agreed with Pernod that it will not talk to its rival.
Diageo trades in 180 countries around the world and makes brands including J&B, Jose Cuervo, Captain Morgan, Tanqueray, and Beaulieu Vineyard and Sterling Vineyards wines. It employs 24,000 people globally and 5,000 people in the UK.
Pernod expects to complete the takeover of Allied late this year or early in 2006.
Constellation Brands - the world's biggest winemaker --has until June 29 to table an official bid or walk away.