Analysis - Diageo could make 'quantum leap' for Moet Hennessy
Moet Hennessy is the wine and spirits unit of luxury goods group LVMH
In a note today (21 May), Nomura's Ian Shackleton said that the UK firm's "strong" balance sheet means it "has firepower to do more deals". Talk of Diageo looking to buy Moet Hennessy outright surfaced in 2009, but LVMH ruled out the sale.
However, Shackleton said Diageo, which has a 34% stake in Moet Hennessy, would still be keen to acquire LVMH's 66% stake as the unit's Cognac business would boost its premiumisation "index" and increase its exposure to Asia.
Diageo and Moet Hennessy already have joint distribution arrangements in place in "most" Asian markets and France, Nomura noted.
Based on Moet Hennessy's 2013 full-year EBITDA, Nomura values the overall business at around EUR29bn (GBP24bn). Therefore, Diageo would have to pay around EUR19bn for LVMH's 66% stake.
Meanwhile, the appointment of Menezes, confirmed as Paul Walsh's replacement earlier this month, is likely to be an "evolutionary, rather than revolutionary" process, Shackleton suggested.
The company is also expected to up its focus on emerging markets by acquiring more local spirits brands, he added.
However, Shackleton said Menezes' appointment had come "sooner than expected", with the anticipation previously that Walsh would remain until the company reported its full-year numbers at the end of July.
The final death count of Typhoon Haiyan, which hit the Philippines last week, is still a long way from being known. The relief effort is well underway, however, and drinks companies are among those th...
- Pernod Ricard 's first-half results - Preview
- Pernod Ricard's H1 performance by region - Focus
- Heineken's FY performance by region - Focus
- Carlsberg's Q4 & full-year results - Preview
- Carlsberg's full-year performance by region
- Asahi Group lines up Grolsch, Meantime, Peroni buy
- Pernod Ricard targets US through unit, exec switch
- Diageo completes wine category exit in US
- William Grant & Sons' Ailsa Bay - NPD
- SABMiller's Europe chief to join Britvic board
- Global travel retail insights - market forecasts, product innovation and consumer trends
- What Next for Beer and Brewers Following the MegaBrew Deal?
- Global Whiskey Market 2016-2020
- Emerging Drinks Industry Trends
- Global sparkling wine insights - market forecasts, product innovation and consumer trends research