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.
2012 Global Multiple Beverage Marketplace
This report looks at the trends and issues affecting the coffee industry, including the constant innovation required to keep consumers' attention. It situates the U.S. market in its global context and...read more
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...
The world’s leading spirits producer, Diageo also ranks 23rd in the global wine market. This profile analyses the role of wine in the company’s wide-ranging alcoholic drinks operations, considering op...
Since the great recession of 2008/2009 Diageo has transformed itself, primarily through acquisition, from being overly focused on mature markets to a more balanced geographic split and if, as seems li...
Alcoholic Drinks in South Africa industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2007-11, and forecast to 201...
Alcoholic Drinks in Colombia industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2007-11, and forecast to 2016). ...
- Interview - Bacardi global marketing boss, whisky
- Comment - Hybrid Spirits: Innovation or Laziness?
- Has Coca-Cola Jumped From Frying Pan to Fire?
- Constellation grapples with glass as reality bites
- Brewers Feel Prolonged Russian Winter
- Mast-Jägermeister targets UK off-trade boost
- Diageo doubles intake for spirits start-ups scheme
- Second senior exec to depart Bacardi
- Portman finds against Diageo "mix it up" tagline
- Bacardi sees North America president step down