Jim Beam ties to Absolut
CHICAGO, March 20 (Reuters) - Jim Beam bourbon maker Fortune Brands Inc. said Tuesday that a $740 million distribution deal with Sweden's Vin & Sprit will add 6-8 cents to 2001 earnings per share and 20-25 cents to 2002 earnings.
The deal, which will marry distribution of Jim Beam, DeKuyper cordials and Sweden's Vin & Sprit's Absolut vodka will also cut 40 percent from Lincolnshire, Ill.-based Fortune Brands' distribution costs, Fortune Brands Chairman and Chief Executive Norm Wesley sold Reuters in a telephone interview.
The increased earnings will come after Vin & Sprit receives a payout for its minority interest in Fortune Brands, Wesley said. Vin & sprit will receive a 10 percent equity stake in Fortune's Jim Beam Brands Worldwide, with an option to buy up to an additional 9.9 percent.
The deal will help give Fortune Brands more power when it negotiates with retailers for shelf space, but allows it to keep ownership of its brands, Wesley said.
"We think we've structured something that is strategically compelling in that it aligns sort of a dream team portfolio of brands," Wesley said.