Blog: Chris MercerDiageo, Moet Hennessy deal rumours fizz, again

Chris Mercer | 18 October 2010

Diageo's long-fabled desire to buy Moet Hennessy is back in the rumour mill.

The Guinness brewer last week cheered analysts by reporting a buoyant first quarter of trading, while Moet Hennessy's parent group, LVMH, announced more strong Cognac sales in China and a rebound in Champagne sales.

Diageo is sitting on a mountain of cash - GBP2bn (US$3.09bn) at the end of its most recent fiscal year. It already owns 34% of Moet Hennessy and has a gaping hole in its portfolio for a leading Champagne and Cognac. Asia's thirst for Cognac has highlighted the disparity between Diageo's lack of activity in this area and the strong gains made by rival Pernod Ricard with Martell.

It has always been assumed that the stumbling block to a deal was LVMH chairman Bernard Arnault. There has not been a compelling case made for Arnault seeking a sale.

What potentially makes the rumours different this time around is that they coincide with speculation that LVMH is eyeing a bid for Hermès. LVMH might be tempted to sell Moet Hennessy to raise cash for Hermès, it is thought.

This may have the whiff of investment bankers touting for business, but the logic for a deal makes sense.


BLOG

Small measures required as Philadelphia soda tax adds up

Philadelphia’s soda tax came into force on Sunday, and is reportedly causing a stir in the city's check-out aisles....

BLOG

Accolade Wines and a giant of the tennis world

Earlier this month, I was most-kindly invited by Accolade Wines to visit the Royal Albert Hall in London. The reason? They wanted to see a tennis great in action, and then give them a guided tour thro...

BLOG

Situation Vacant - Must love whisk(e)y

Do you like whisk(e)y? And, I mean, really like whisk(e)y? Are you at a loose end in the first half of 2017? If so, then I've found just the job for you....

BLOG

Angostura advertises the news

Most of the time, changes at the top of a company present themselves in press releases, stock exchange filings or responses from a spokesperson....

just-drinks homepage



Forgot your password?