Here we go again. A month or so after Pernod Ricard and Brown-Forman terminated discussions over their mooted “merger of equals”, we have another “will they, won’t they?” M&A saga on our hands. The proposed acquisition of a majority stake in Maison Pommery & Associés by Henkell Freixenet may be considerably smaller in terms of the sums involved but, in the world of sparkling wine, it’s a very big deal indeed.
Henkell Freixenet – part of the family-owned Oetker Collection KG – has built a dominant position in the world of fizz, amassing €1.25bn ($1.45bn) in revenues last year thanks to a roster of brands that includes a couple of world leaders: Freixenet, the planet’s biggest sparkling wine brand, and Mionetto, the leading international Prosecco.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The company’s share of the global sparkling wine market (excluding Champagne, Lambrusco and the Russian market) stood at just under 10% (volume and value) in 2024. In an industry as fragmented as wine, those are impressive numbers.
The range of segments covered by the business is pretty comprehensive, spanning Cava, Prosecco, Crémant and Sekt, plus (through 2022 acquisition Bolney Wine Estate) English sparkling. If the company has a weakness, it lies in the fact that it is seriously underweight in the most lucrative sparkling wine category of them all: Champagne. Alfred Gratien is a quality house but constitutes a relatively small part of the Champagne universe.
Maison Pommery & Associés would change that. It comes with a top-ten Champagne brand, Pommery, plus Vranken, Charles Lafitte and the recently launched Maison Pompadour – a high-end Pommery offshoot sourcing fruit from the house’s historic 25-hectare vineyard in Reims that has been more than 20 years in the gestation.
Maison Pommery is also a business in transition – in fact, there’s an argument for saying that it’s been in transition for at least a couple of decades, possibly even dating back to the acquisition of Pommery from LVMH in 2002.
The historic Vranken-Pommery Monopole (the name of the business until this year) model was strongly focused on selling large volumes of relatively inexpensive Champagne in the French domestic market. That was fine – if fiercely competitive – in an age when France hoovered up well over half of Champagne’s global volumes. But the long-term structural decline of the domestic Champagne market has changed that dynamic.
The company’s response has been a long-term effort to premiumise, progressively edging out of low-margin, high-volume trading and what is coyly referred to as “interprofessional sales” – the rather grey trade in anonymous bottles between Champagne operations.
Debt reduction has also been a strong priority (the company’s debts stood at just above €750m at the end of last year). Some inroads have been made through the €50m sale of Heidsieck & Co Monopole last October to rival Lanson-BCC’s Maison Burtin division and via the sale of Champagne stocks to leading shareholder Compagnie Vranken.
There’s also been a more explicit emphasis on Pommery, clearly the jewel of the business, with a renewed focus on the underrated Cuvée Louise prestige cuvée, plus the launches of the Apanage 1874 line and Cuvée 150 Ans Blanc de Blancs. Volumes of premium Pommery Champagnes, also including Grand Cru Royal, were up 8.1% last year.
A more internationally weighted business less reliant on low-margin sales is a considerably more attractive proposition than the old Vranken-Pommery Monopole
Those 2025 results, while hardly spectacular, illustrate how Maison Pommery is evolving. While overall Champagne revenues were down 1.8% (thanks to a reduction in those “interprofessional sales”), packaged Champagne volumes were up 3.6% and value flat against the backdrop of a declining market. Exports accounted for 61% of the company’s Champagne sales last year; a decade ago, that share figure was only 33% – a dramatic shift partly explained by the disposal of Heidsieck & Co Monopole.
Has that evolution prompted the interest from Henkell Freixenet? A more internationally weighted business less reliant on low-margin sales is a considerably more attractive proposition than the old Vranken-Pommery Monopole. Timing could be a factor too – Champagne sales are at a relatively low ebb after three consecutive years of declining shipments, which could trim a bit off the asking price.
It’s also worth noting that Maison Pommery, while largely Champagne-focused, is a player in other categories too: Provence rosé with Château La Gordonne, Camargue ‘vins de sable’ with Domaine Royal de Jarras and Douro wines and Ports with Terras do Grifo and Rozès.
My first instinct on hearing news of the merger talks was that Henkell would have little interest in these aspects of the business – perhaps especially the Portuguese element. These are challenging times for volume-driven Port and the company’s total Portuguese wine sales slumped by more than 20% last year thanks to the loss of a major retail listing.
This is an acquisition that could well make sense for both parties
But Henkell Freixenet too has fingers in other pies, including Schloss Johannisberg, I Heart Wines and Mangaroca Batida – and the French still wines in particular sit in an attractive part of the market. There’s also, it should be added, the Louis Pommery English sparkling operation in Hampshire, which could be a useful addition alongside Bolney in West Sussex.
As the Pernod/Brown-Forman/Sazerac merry-go-round illustrates, nothing is certain in the corporate world. But this is an acquisition that could well make sense for both parties and it will clearly cement Henkell Freixenet’s global leadership in the sparkling category, following the company’s acquisition of the remaining shares in Freixenet this March.
It is also a sign of the challenges confronting the broader wine industry amid falling consumption, rising moderation levels and persistent cost-of-living pressures. Sparkling wine has largely bucked this negative trend but has faced difficulties of its own, encapsulated by the increasing costs and falling consumption levels afflicting Champagne.
If this deal goes ahead, I doubt that it will be the last transformative development in the wine industry in the near future. In a different category, Australia’s Treasury Wine Estates has just announced a radical revamp of its business, slashing brands and consolidating its focus on growth priorities. These are big changes – painful changes, for some – but necessary for the future prosperity of wine’s leading players and the industry they inhabit.
