Acquisition

Diageo PLC
19 December 2000



               Diageo plc and Pernod Ricard SA to acquire
                  Seagram spirits and wine business

Diageo plc and Pernod Ricard SA today confirm that they have signed an
agreement to acquire the spirits and wine business of The Seagram Company
Ltd., for US$8.15 billion (£5.5 billion) in cash on a debt free basis.  The
purchase consideration will be funded by Diageo and Pernod Ricard as to $5.0
billion by Diageo and as to $3.15 billion by Pernod Ricard.  The agreement is
principally conditional on clearance by the anti-trust regulatory authorities.

Diageo and Pernod Ricard will each retain certain key businesses from the
Seagram portfolio and the companies have agreed to work together to dispose of
the other businesses.  The agreement between Diageo and Pernod Ricard governs
both the allocation of Seagram businesses and the interim management of those
businesses that neither company plans to retain.

Diageo plc
The proposed transaction further reinforces Diageo's position as the world's
leading beverage alcohol company.  On 17 July 2000, Diageo announced a
strategic realignment of its business to focus on its beverage alcohol brands
in their most important markets.  Almost exactly three years after the
creation of Diageo, today's announcement is another milestone in delivering
Diageo's stated strategy of profitable growth through focus on priority brands
in key markets.

The acquisition will result in Diageo obtaining  Crown Royal and VO Canadian
whiskies, Captain Morgan rum and 7 Crown American whiskey.  Each have leading
positions in their categories and Diageo will gain the scale to achieve
significant distribution efficiencies.  Diageo is also acquiring wine
businesses, principally Sterling Vineyards, which will be an important step in
building a value-creating wine business.

Diageo is also obtaining several brands with attractive local positions.
These include Cacique rum in Venezuela and Spain, Windsor Premier Scotch
whisky in Korea and Myers, a premium rum in the US.

Commenting on the announcement, Paul Walsh, Diageo Group Chief Executive said:
'This transaction is the next step in transforming Diageo from a food and
drinks group with four operating businesses, into a focused leader in the
global beverage alcohol industry.

'We are acquiring some great brands with this business.  We are prepared to
start work immediately on integrating them into Guinness UDV.  The creation of
UDV by bringing together United Distillers and IDV and the subsequent
combination of Guinness and UDV shows that we have a great track record in
this field.

True to our managing for value disciplines the acquired businesses will
generate economic profit assuming a 9% weighted average cost of capital in the
fourth year.  It has an immediate positive impact on eps.'

Agreement between Diageo and Pernod Ricard
On 6 December 2000, Diageo plc and Pernod Ricard SA confirmed that they had
signed a formal agreement governing their bidding arrangements for the Seagram
spirits and wines businesses.  Its provisions are designed to facilitate
clearance of the transaction by anti-trust authorities, in Canada, Europe and
in the US.  The agreement also covers the split of Seagram's activities, the
integration process for the business, the interim management for the non-core
businesses which are to be sold over a period of 12 months, and the
supervisory team which will co-ordinate it.

The economic interest in these non-core businesses, including operating
profits or losses and disposal proceeds, is to be shared between Diageo and
Pernod Ricard in the ratio of 61.4%/38.6%, in keeping with the split of the
consideration for the acquisition.

Other Information
The agreement with Seagram provides for certain indemnities from Seagram in
the event that the right of first refusal asserted by Destileria Serralles
over Captain Morgan is upheld in litigation.

Diageo expects that the entire consideration for the businesses it will retain
will be represented in its consolidated balance sheet by the underlying net
assets, including brand values.  Accordingly it does not expect there to be
any significant accounting goodwill arising on consolidation.  Pending
disposal Diageo will reflect its interest in the non-core businesses as assets
held for disposal.  Consequently, their operating results pending disposal
will not be reflected in the profit and loss account of Diageo.  The value
attributed to the non-core businesses as a whole in agreeing the acquisition
consideration amounts to some $670 million which represents a prudent estimate
of the expected disposal proceeds.  Diageo's share of this is $410 million.

The published accounts of Seagram do not segment the business in accordance
with the intended split of the businesses between Diageo and Pernod Ricard.
Diageo estimates that the net sales value attributable to the businesses it is
acquiring amounted to some $1,090 million in the year ended 30 June 2000, and
that the brand contribution before the allocation of overheads amounted to
approximately $530 million.  Diageo expects the incremental level of overhead
attributable to these businesses under its ownership to be some $60 million
per annum once integration of the businesses has been completed.  Diageo's
share of the one-off costs of achieving integration, most of which will be
cash costs, are expected to amount to some $700 million, of which
approximately 90 per cent is expected to be spent by the end of the first full
year following the acquisition.

The financial adviser to Diageo is UBS Warburg.  Mr Robert Greenhill of
Greenhill & Co has provided additional special advice to Diageo.  The
principal legal advisers to Diageo are Sullivan & Cromwell in the US and
Slaughter and May in the UK.

For further information, please contact:

Investor enquiries        Catherine James            + 44 (0) 20 7927 5272
                                                     [e-mail]
Media enquiries           Kathryn Partridge          + 44 (0) 20 7927 5225
                                                     [e-mail]

Diageo will hold a briefing for analysts and investors at 10:00 GMT on
Wednesday the 20th December at The Lincoln Centre, 18 Lincoln's Inn Fields,
London WC2.  This meeting will be webcast on www.diageo.com.  This
presentation will be broadcast by RAW.  This will be followed by a media
briefing at 12:00 GMT at The Lincoln Centre, 18 Lincoln's Inn Fields, WC2.
This presentation will also be webcast on www.diageo.com.

There will be a US tele-conference call for investors at 15:00 GMT.  Please
call 800 553 2173 (for US investors) 800 553 2178 (for Canadian investors) and
[phone] (for European investors) participants should quote Diageo
plc.