Blog: Chris Brook-CarterMarket set for a bubbling few weeks

Chris Brook-Carter | 6 July 2005

The really quite trivial story of Welsh singing star  Charlotte Church admitting this week to splashing out  GBP1,000 on two bottles of bubbly coincided more  interestingly with news that as many as four major  Champagne houses could potentially change hands over the  next couple of months.
Though one story got splashed, depressingly, across the  front pages of today’s UK tabloids, while the other was  confined to the business pages of the broadsheets, the two  are not entirely unrelated.
Mumm and Perrier Jouet now look all but certain to join  the ranks of Pernod Ricard at the end of this month after Allied Domecq shareholders gave the takeover plan the  thumbs up yesterday. However, these two global brands now  look set to be joined by Taittinger and Lanson on the  market.
A firm line-up of potential suitors for the Taittinger  Champagne business could be in place within four or five  weeks, according to reports today. The controlling family  has retained two banks, Rothschild and BNP Paribas, to  entertain offers. Private equity firms PAI, Eurazeo,  Cinven Group and Wendel Investissement, meanwhile, are all  thought to have made contact over acquiring the  business.
At the same time, Lanson’s 44% stake holder Caisse  d’Epargne, the French bank, has suggested that it would  engage in talks to sell its holding.
It is the very fact that wealthy young drinkers, such as  Church, are willing to spend so much on Champagne that  makes these sales so interesting.
It certainly seems a good time to be a seller. These  brands will certainly command high prices and attract a  number of interested parties. Over the past four years,  despite a great deal of political and economic upheaval,  Champagne sales have continued to grow. While many other  major vineyard areas in France face great trauma and  dwindling overall sales, demand for this unique sparkling  wine has risen steadily, despite its relatively high  starting price.
But Champagne brands also look like a sensible investment  for possible suitors.
Champagne - within its current borders - is at its  maximum production levels. Growth can only come from price  increases and, if current trends and global economic  stability continue, there appears to be no reason why the  Champenoise cannot look forward with optimism.


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