The French drinks and luxury goods group, LVMH, has reached an agreement to acquire a 40% stake in the US spirits importer, Millennium Import Company, part of the Minneapolis-based Phillips Beverage Company.

Millennium owns a controlling stake in the Polish spirits producer, Zyrardow Distillery, located near Warsaw, and also owns the exclusive worldwide rights to two premium vodka brands, Belvedere and Chopin. LVMH's wines and spirits division, Moet Hennessy, will add the Belvedere and Chopin brands to its portfolio and distribute both brands outside the US.

In introducing the two brands around five years ago, Millennium was aiming to tap into the demand for premium vodka in the US and the brands have grown as that market has expanded. They are expected to sell in excess of 450,000 cases in the US in 2002.

The company is now looking to expand the brands outside the US and to this end was looking for an international partner. "We consider LVMH to be the quintessential luxury brands company in the world and Moet Hennessy to occupy the same pillar position in the international drinks industry," said Millennium's CEO, Edward Phillips. "We carefully identified Moet Hennessy as our worldwide partner based upon shared values, culture and know-how."

Moet Hennessy's president, Christophe Navarre believes the partnership brings together complementary strengths. "Edward Phillips and his team have built a fine business at Millennium and we are delighted at the prospects of working with them and investing in their company," Navarre said. "We look forward to helping to build their brands worldwide thus strengthening Moet Hennessy's position as the leading luxury Wines and Spirits Group. This partnership brings together complementary strengths and savoir faire in a market that presents great opportunities for creating value."

The deal is subject to board and regulatory approval and is expected to be completed by the year-end.