York to buy Seagram's wines and spirits empire for around $8.2 billion, beating off a rival bid from a Bacardi-led consortium, industry sources said yesterday.

The deal is due to be signed by Diageo's Finance Director Nick Rose and Pernod officials at the offices of auction organiser Morgan Stanley and Seagram's lawyers Simpson, Thacher and Bartlett in New York. An official announcement is expected tomorrow.

The purchase will extend Diageo's lead in the world's spirits industry, where it is already more than twice as large as number two player Allied Domecq, while Pernod will look to challenge for that global second spot.

Last minute delays to the deal were caused when the French seller of Seagram, Vivendi Universal, tried to get the Bacardi team to increase its bid, which is believed to have been just below $8 billion, in what had become a two-horse race.

"The Diageo and Pernod team offered the best deal -- the highest price, the least anti-trust problems and the quickest way of Vivendi getting its cash,'' said one source.

Bermuda-based Bacardi with its partners, Jack Daniel's whiskey maker Brown-Forman and Absolut vodka owner Vin & Sprit, had been unable to raise its bid after only agreeing a syndicated loan organised by Chase Manhatten earlier this month.

Industry analysts say the Diageo-Pernod team could afford to pay more as it can win greater cost saving synergies than the the Bacardi-led team.