You Only Get One Shot: The Puchase of Seagram's by Diageo
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You Only Get One Shot: The Puchase of Seagram's by Diageo

The story of Diageo's purchase of Seagrams had been leaking out for several days. The leaks and subsequent reporting provided sufficient detail (specifically in the Wall Street Journal and the Financial Times) to significantly question whether the subseq

Paul Holmes

In December of 2000, Diageo PLC and Pernod-Ricard SA won a joint bid ($8.15 billion), which is still under regulatory review in both the U.S. and Great Britain, to purchase the drinks portfolio of Seagrams Co.    For months there had been speculation that the Diageo/Pernod Bid would eventually win out over the other competitors, largely considered to be Allied Domecq PLC and a joint bid by Brown-Forman Corp and Bacardi International LTD.  However, in the months leading up to the close of bidding, Allied Domecq had laid claim to (through the purchasing of distribution rights) a Diageo signature label, Stolichnaya Vodka, and one of the jewels in the Seagram’s portfolio – Captain Morgan Rum.   

Having claimed these successes, Allied pulled out of the bidding immediately prior to the close of the auction, leaving questions as to the value of the Seagrams portfolio as well as to the strategies of the remaining companies vying for Seagrams.  Consequently, by the time the deal was announced, interest was not focused so much on who would win the bidding, but rather what they were getting and what the acquisition would mean for the winning bidder.  Guinness UDV, the North American arm of Diageo, was left with the task of having a press conference (and generating coverage) to announce the deal that would have already been announced in London.

OBJECTIVES AND PLANNING:

Guinness UDV had many objectives regarding generating press surrounding the purchase.  Primarily, the company sought to:

  • Design a press conference that could be triggered on a few hours notice, while at the same time being discrete enough not to tip our hand as to our expectations of ultimately securing the deal 
  • Deliver the message that this deal would be good for North American investors 
  • Communicate to the business community what the acquisitions of these new brands and resulting company would look like 
  • Put a US/North American face on the deal 
  • Combat the perception in the media that Allied Domecq had adopted a successful strategy of selectively poaching premium brands 
  • Communicate the idea that the integration of the two portfolios was a natural one

CHALLENGE

The story of Diageo's purchase of Seagrams had been leaking out for several days.  The leaks and subsequent reporting provided sufficient detail (specifically in the Wall Street Journal and the Financial Times) to significantly question whether the subsequent story would get much coverage.  (It is also worth noting that this was a European story and as such, North America had to follow company actions and announcements made in the European community).

Without coverage, it would be extremely difficult to convey the message as to the strategic importance of the deal to Diageo, and specifically to Guinness UDV – especially in light of the erosion that had taken place at the behest of Allied Domecq.  In light of this, it was decided that a strong image was needed for the “hook.”  There needed to be a single image created to encapsulate the whole story; that Diageo had just purchased Seagram in a mammoth deal that solidified Diageo as the market leader in spirits.  Further, this image needed to be compelling enough to get carried in the papers across the country. 

STRATEGIC APPROACH AND CAMPAIGN EXECUTION:

Having identified the issues/challenges, a diverse group of individuals (representing varied interests and backgrounds) held numerous brainstorming sessions.  Opinions and thoughts were shared among media companies, PR firms, Guinness UDV external affairs people, various consultants, IR people etc.  When the actual press conference was finally scheduled, the company had the “shot” ready.  Bottles were strategically placed on the table with appropriate lighting, and Paul Clinton (President, Guinness UDV) casually strolled over to the table, spread his arms in a protective embrace, leaned over his empire and smiled for the cameras.

RESULTS
The resulting photograph circulated throughout the country over the news wires.  Both Reuters and AP carried it.  The pictures conveyed everything that had been set out for it.  The US face is put to it by having the North American President “lording” over the table of his new portfolio.  The integration of the new company is represented by the brands’ peaceful coexistence on the table.  The strength of the new company is depicted by the sheer number of the popular, easily recognizable brands.  And the individual brands are promoted because each of their labels is easily and strategically distinguishable in the shot.  This photo appeared in over 75 markets, far more than would have ever covered the story of “the deal.”

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