The German soft drinks producer Brau-und-Brunnen is reportedly in negotiations to acquire the mineral water bottler Margon Brunnen from its parent Gerolsteiner Group.

The two companies did not elaborate on the reports, which appeared in the German press today.

Gerolsteiner has invested 60m (US$63.3m) in Margon since its takeover in 1990 and the group had plans to invest a further €4.8m through to 2005.

The company, which bottles mineral water from 13 springs in the eastern German state of Saxony, reported turnover of  €20m on volumes of 717,000 hectolitres of mineral water in 2001.

Despite the generally good look for mineral water sales globally, the Saxony market is relatively downbeat in its forecasts because of the introduction of an environment tax and the disposable packaging deposit that has come into force this year.