STOCKHOLM, Sweden (AP) - Sweden's famed Absolut vodka will become absolutely French - in ownership at least - following a successful $8.34 billion bid from Pernod Ricard SA.

The French spirits company agreed to pay the Swedish government 5.28 billion euros for Vin & Sprit, the maker of Absolut, outbidding three competitors.

Pernod Ricard also will assume 346 million euros ($546 million) in outstanding debt as part of the deal for Absolut, which was put on the auction block in a sell-off of state-owned companies.

"We wanted to bolster our presence in the US and Absolut, with its five million cases will definitely do that," said Pernod Managing Director Pierre Pringuet, referring to Absolut's yearly sales in the US.

"We intend to develop the brand and if possible accelerate its strengths," he said.

The government said it selected Pernod Ricard's bid on Sunday over three other offers, by liquor groups Fortune Brands and Bacardi Ltd. and an investment group controlled by Sweden's Wallenberg family.

"All four presented well prepared and very interesting proposals, but it was soon clear to us that Pernod Ricard's bid was the best," Sweden's Financial Markets Minister Mats Odell said. "It is a very good price for the company."

Pernod Ricard shares fell 4.27 percent to 65.18 euros ($102.96) in Paris trading yesterday in an overall lower market.

The government said Pernod Ricard - owner of Chivas Regal whisky, Mumm champagne and Beefeater gin - intends to keep Absolut in Sweden.

"There is no written contract about that but the value of the brand is because it is Swedish," Pernod Ricard chairman Patrick Ricard said. "A Swedish brand must be produced in Sweden."

The government said the deal includes the whole company, except for Vin & Sprit's 10 percent share in US spirits company Beam Global Spirits & Wine, which would be sold under a previous agreement with Beam shareholders.

The deal will be completed this summer.

With its range of flavors from peach to blackcurrant, Absolut is the premium brand in Vin & Sprit's product range.

Its other brands include Cruzan rum, Plymouth gin, a handful of Scandinavian aquavits and bitters and hundreds of wines.

It is estimated that Absolut accounted for roughly half of the $1.48 billion in Vin & Sprit's sales for 2006.

Pernod Ricard said the deal would create synergies estimated at $197-$237 million annually before taxes, partly by integrating distribution networks.

"These synergies should be put into place in between two-four years after the finalisation of this acquisition, depending on the timeline of distribution accords," the company said in a statement.

As a result of the deal, Pernod Ricard said it would end its distribution agreement with another vodka brand, Stolichnaya.

The French company said it would divide the payment for Vin & Sprit in two currencies - $6.05 billion and 1.45 billion euros. Including the outstanding debt, the deal would have an enterprise value of 5.63 billion euros ($8.89 billion), using Friday's exchange rate, Pernod Ricard said.

The Swedish government, using an average exchange rate over the past 30 days, said the deal, including the debt, was worth 55 million kronor ($9.24 billion).

The government said last year it would sell Vin & Sprit as part of a broader sale of state assets in a move to pay off the country's debt.

"I think this is a very important deal that we have done with Pernod Ricard since it is at a better price than what was expected and that it shows that you could make successful deals even in the financial turbulence that we have actually seen," Swedish Prime Minister Fredrik Reinfeldt said.

The state sell-out also includes assets in banking group Nordea AB, telecom TeliaSonera AB, Nordic bourse operator OMX AB, real estate company Vasakronan AB and mortgage lender SBAB.