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Pernod Ricard paid €5.63 billion (£4.48 billion) at auction to acquire Sweden's Vin & Sprit, the owner of leading premium vodka brand Absolut.

France-based alcoholic drinks producer Pernod Ricard said the deal puts the company on a par with wine & spirits leader Diageo, with global spirits volumes of 91 million cases and the top position in the premium spirits sector, with a 27 per cent market share.

In the US, the largest spirits market worldwide, Pernod Ricard’s position increases from number four to number two with a market share of close to 14 per cent.

The purchase price includes net debt of €346 million (£275.6 million), and state-owned Vin & Sprit will pay the Swedish government a dividend of €85 million (£67.7 million) before closing.

Patrick Ricard, chairman and chief executive of Pernod Ricard, said: "The acquisition of V&S by Pernod Ricard is a fantastic opportunity and represents our third transformational acquisition since the Seagram and Allied Domecq transactions.

"We become thus the co-leader of the global wine and spirits industry."

Pernod Ricard outbid rivals including Fortune Brands to acquire the company and is borrowing from six banks to finance the deal.

Sweden's prime minister Fredrik Reinfeldt put V&S up for sale to decrease the state's involvement in the economy and reduce the government's debt.

Pernod Ricard said the deal will generate significant value creation for its shareholders, adding the transaction is expected to be neutral in year one and significantly positive thereafter.