FRANCE: Taittinger deal fails to impress in India

The victory of French bank Crédit Agricole du Nord Est in the race to acquire the Champagne house Taittinger has once more bought into question the willingness of French authorities to allow foreign groups to acquire the country's leading companies.

Last year, rumours that the US group PepsiCo was mulling a bid for the French food and drinks company Danone prompted a number of leading French politicians to call for the State to defend French interests and block any bid.

Crédit Agricole's main opponent in its efforts to acquire Taittinger was the Indian drinks giant the UB Group and Indian officials have suggested that nationality now played a role in deciding the Champagne group's fate.

"The nationality of the bidder should not matter at all," Kamal Nath, the Indian Minister for Commerce, was reported as saying in the French press. "Such decisions [as Taittinger] should purely be taken on commercial grounds. Rolls-Royce was a British symbol - now it is a German-owned business and nobody is concerned."

UB Group's involvement in the bidding process had already caused controversy within the Champagne industry, with Bruno Paillard of the Interprofessional Committee of Champagne Wines (CIVC) saying the Indian bid "raised concerns".

"The CIVC has reservations about the possible acquisition of a major player in the Champagne market - Taittinger - by a firm from a country that does not respect the principle of controlled origins for wines," he had said.

A report in the New York Times quoted a United Breweries spokeswoman saying that Taittinger had rejected its US$600m bid after Crédit Agricole was pressurised into raising its bid. The bank finally offered around EUR660m (US$841m).

However, French press reports had Christine Lagarde, the French Minister for Overseas Trade, defending the deal. "Questions of investment are not decided by discrimination based on race, creed or colour, but only by shareholders," he said.