But he added that the brand was indemnified by Seagram to a limit of $1.8bn in the event that Allied emerged as the winner.The Seagram deal cements Diageo’s position as the world’s top-ranked spirits company and allows Pernod to overtake Bacardi as the number three player behind Allied Domecq.Diageo’s share of the one-off costs of achieving integration are expected to amount to $700m. The brands to be acquired by Pernod include Chivas Regal and Glenvilet whiskies, Martell Cognac and Seagram’s Extra Dry gin. The remaining contents of Seagram’s drinks cabinet will be sold on to third parties. Labels earmarked for disposal have been valued at about $670m. Potential bidders include the Paris-based Rémy Cointreau.The acquisition is said to be conditional on regulatory approval and it could take months to complete the transaction. “The chances are that one or both of the US and EU regulators will want to put their oar in,” an analyst said.

Meanwhile, share prices could come under pressure, and any synergies that could be realised by integrating the Seagram assets could be put on hold.Diageo shares closed down 5.5p at 711p Allied Domecq fell 1.5p to 431p.. Two members of the Bank of England’s Monetary Policy Committee wanted a cut in interest rates this month because of worries about the global economy. Two members of the Bank of England’s Monetary Policy Committee wanted a cut in interest rates this month because of worries about the global economy.
The minutes released today of the committee’s December meeting two weeks ago show that DeAnne Julius and Sushil Wadhwani supported a 0.25-per-cent cut in the official cost of borrowing.The committee voted to keep the rate at 6 per cent, but today’s news will give hope to industry chiefs that the peak is past.. Economic secretary to the Treasury Melanie Johnson, announced yesterday that the Financial Services Authority will launch an inquiry into the events that precipitated the crisis at Equitable Life, following evidence that the Government was concerned at the mutual insurer’s solvency more than two years ago. Economic secretary to the Treasury Melanie Johnson, announced yesterday that the Financial Services Authority will launch an inquiry into the events that precipitated the crisis at Equitable Life, following evidence that the Government was concerned at the mutual insurer’s solvency more than two years ago.
However, MPs immediately dismissed the investigation as inadequate in “scale and scope”.The investigation will only address events after January 1999 when the FSA took over responsibility for supervision from the Department of Trade and Industry. Crucially, it omits the key period between November and December 1998 when regulators began to take a closer interest in Equitable Life’s solvency and provisioning policies.Liberal Democrat Treasury spokesman Vincent Cable said he wanted a broader independent inquiry and was concerned that the FSA was investigating itself. “The whole structure of supervision of the insurance industry needs to be investigated We need a Cruickshank of the insurance industry,” he said.

The reference was to the government-sponsored report by Don Cruickshank, the former telecoms watchdog, into the banking industry.Mr Cable said he would be pressing for the FSA chairman Sir Howard Davies to go before the Treasury Select Committee to answer questions about the affair. Howard Flight, for the Conservatives, called for government aid to refloat the Equitable business saying that the affair had undermined public confidence in the entire life and pensions industry.Ms Johnson said that the results of the inquiry, which is being launched in response to allegations that regulators were negligent in their supervision of Equitable, will be made public.Equitable Life, Britain’s oldest mutual insurer, closed its doors to new business 12 days ago. This followed the failure of attempts to find a buyer willing to plug a £1.5bn “black hole” which opened up in the wake of a July House of Lords’ ruling that its treatment of holders of so-called guaranteed annuity policies was unfair.As well as the 450,000 with-profits policyholders who own the company, the crisis could affect as many as 1 million people whose pensions are managed by Equitable Life. As well as MPs, these include National Health Service workers, employees of the BBC, Sainsbury’s and other blue-chip firms.