U.S. firm Starwood Capital is buying majority stakes in the French companies behind Taittinger champagne and the palatial Paris hotel Le Crillon and is looking to sell the champagne business, it said on Friday.
Real estate investment firm Starwood Capital said it was buying holding company Taittinger, owner of the renowned champagne brand, in a deal valuing the company at 1.17 billion euros ($1.4 billion).
The purchase of Taittinger gives Starwood 44 percent of the hotel and luxury goods group Societe du Louvre, which runs the Baccarat crystal works and Annick Goutal perfumes.
Starwood, which helped create Starwood Hotels & Resorts Worldwide, also bought two other stakes totalling 21 percent in Societe du Louvre, owner of Le Crillon, to give it 65 percent control.
The takeover comes as France’s top politicians have pledged to prevent another leading French firm, food group Danone, from falling into the hands of U.S. drinks giant PepsiCo, rumoured to be preparing a bid.
Starwood Chairman and Chief Executive Barry Sternlicht said in a statement the main focus was to expand the hotels business into areas such as fast-growing eastern Europe and to renovate some of the portfolio’s luxury hotels.
His company is seeking advice from the Taittinger family on how best to dispose of the champagne unit.
“Starwood has the intention of selling Taittinger (champagne),” said a spokesman for Starwood in Paris. “It’s likely there will be many potential acquirers.”
Taittinger’s stock, which climbed in recent weeks after the group said it was reviewing its luxury goods assets, fell more than 10 percent on Friday.
The Starwood spokesman declined to comment on whether his company had already received any offers for Taittinger champagne, but many analysts speculated that French drinks group Pernod Ricard could make a bid.
“Likely bidders could be American companies Fortune Brands and Constellation Brands. Pernod Ricard could also show interest,” brokerage Fideuram Wargny said in a research note.
Pernod’s recent takeover of British rival Allied Domecq made it the number two world player in its sector, behind Diageo.
“Even though Pernod is financially a bit constrained with its takeover of Allied, this acquisition (Taittinger) would be a unique opportunity for it to make a big entry into the champagne sector,” added Fideuram.
Pernod declined to comment on the situation.
In Friday’s deal, Taittinger said key shareholders would sell their 65 percent stake in Taittinger at 336.24 euros each and 295.89 euros per investment certificate.
Taittinger’s stock fell 10.2 percent to 332.9 euros while Societe de Louvre dropped 6.7 percent to 145.50 euros.
Taittinger shares leapt last month after the group said it had mandated Rothschild and BNP Paribas to review several offers it had received, with the agreement of its main shareholders.
The sale, subject to approval by the competition authorities, is expected to close at the end of the third quarter, Taittinger said.
Starwood was advised by Eurohypo and Citigroup.
