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For Sale: Two of Champagne's Top Houses

Taittinger family members try to buy back their firm, while Lanson negotiates with a rival

Posted: December 21, 2005

While people everywhere are picking out bubbly for holiday celebrations, executives at two leading Champagne producers are negotiating the sale of their companies. Five months after the Taittinger family sold its luxury-goods empire to a U.S.-based hotel investment group, some family members hope to buy back the Champagne division; but there are other potential bidders. Meanwhile, the owners of Lanson are negotiating a sale to a rival Champagne maker, Boizel Chanoine, after two other bidders dropped out.

Talks between Lanson and Boizel were confirmed last week by French newspapers, which reported that Boizel chairman Bruno Paillard hoped to seal a deal by February. "The sale is still being negotiated," said Jeff Becker, Lanson's executive vice president and COO for the Americas, though he wouldn't confirm that Boizel was the buyer.

Founded in 1760, Lanson is one of Champagne's largest producers. The house has struggled, though, since 1990 when it was bought by Moët-Hennessy Louis Vuitton, which sold off the brand while keeping the vineyards. French bank Caisse d'Epargne paid 38 million euros for a 44 percent stake in the company in 2004 to help keep it afloat, but bank officials made it clear this summer that they wanted out.

Boizel dropped out of the bidding last month, but jumped back in after Butler Capital, LVMH and advertising millionaire Jean-Claude Darmon all withdrew their offers. Paillard would not comment on the sale, but he told Wine Spectator in July that "Lanson has been poorly managed for 15 years."

Lanson has focused on sales in the United Kingdom and other European markets, and has concentrated on its lower-priced, non-vintage Champagnes. Although some of its vintage Champagnes have received outstanding to classic ratings and its Black Label Brut NV received 91 points on Wine Spectator's 100-point scale last year, the brand has not sold well in the United States.

Groupe Taittinger and Société du Louvre were bought by Starwood Capital in July, but the Connecticut-based investment group was chiefly interested in the company's hotel chains and always intended to sell off the Champagne house, which is known for its Comtes de Champagne vintage cuvées. Claude Taittinger, chairman of the house, would not comment on a potential bid, but two sources in the industry said that at least some of the 38 Taittinger heirs were putting together an offer. Other possible suitors include several large international liquor companies and Belgian investor Albert Frère, who owned a minority stake in the house before its sale and is a partner in Bordeaux's Château Cheval-Blanc.

The French think of Champagne as more than just a product, which has injected some nationalistic tensions into the bidding process. Frère warned the French government against "xenophobia" in September after a newspaper reported that President Jacques Chirac was urging Starwood and the Taittinger family to keep the house in French hands. Chirac denied the story, but his administration has called for "economic patriotism" ever since reports surfaced last summer that Pepsi wanted to buy French food giant Danone.

Ironically, it was French government policy that spurred the Taittingers to sell their company to an American firm. Claude told the Times of London in September that France's high wealth tax was to blame for Groupe Taittinger's sale. The government eliminated a cap on the tax in 1997, which forced many Taittinger heirs to pay taxes higher than their annual incomes. Some family members moved to other countries.

Whoever buys Taittinger will acquire a house in much better shape than Lanson. The third-oldest Champagne house, Taittinger began life as Forest-Fourneaux in 1734. Pierre Taittinger bought it in 1931. Today, Taittinger produces more than 400,000 cases annually and owns more than 650 acres of vineyards—a rarity in a region where producers buy most of their grapes from small growers, of which there are more than 20,000.

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