Mumm and Perrier-Jouet are among the most popular Champagne brands in the United States, where about 100,000 cases of each are sold annually. Seagram has owned both houses since the 1950s. Mumm is best known in the United States for its non-vintage brut, Cordon Rouge, while Perrier-Jouet is most recognized for its Fleur de Champagne (also simply known as the flower bottle), its vintage-dated prestige cuvee.
"This agreement enables us to generate significant cash," said Steven Kalagher, president and CEO of the Seagram Spirits and Wine Group. He indicated that the sale, which is expected to close in July, is not a sign that the Montreal-based drinks and entertainment group is divesting itself from the wine and spirits industry to focus on the television, movie and music side of its business.
Late last year, the company announced a strategic reorganization of its wine and spirits business. "We are very much focusing and prioritizing our investments behind brands that could deliver sustainable and profitable growth for us," said corporate spokeswoman Susan Taylor. "We remain absolutely committed to wine and spirits and to growing our business."
As part of the deal, Seagram will hold on to Mumm Cuvee Napa, its California sparkling wine; its Latin American business, which includes the Cuvee Mumm and Domaine Mumm brands; and the Mumm Sekt and Jules Mumm brands, which are distributed in Germany and Austria. "These are quite separate businesses," commented Taylor.
She added that keeping the distribution rights to Mumm and Perrier-Jouet was an excellent way for Seagram to retain involvement with the brands. "We will be working hand in glove with Hicks Muse to carry on building these brands into the millennium and beyond."
Hicks Muse -- a private equity firm with offices in Dallas, New York, London, Mexico City and Buenos Aires -- invests in and develops well-known brands such as Ghirardelli Chocolate, 7-Up and Del Monte. The company is now seeking to develop a portfolio of global wines and spirits. "This is a unique opportunity for us to purchase two grande marque Champagne houses of international renown," said John Muse, COO of the firm. He added, "This acquisition is our first platform investment in France and represents a substantial and prestigious addition to our growing portfolio of European assets."
Jean-Jacques Frey, a Champagne producer whose company, Groupe Frey, owns the Henri Germain and Binet Champagne brands, will also invest in the deal with Hicks Muse.
No other changes have been announced so far for the Champagne houses. Jean-Marie Barillere, director general of Mumm, in Reims, and Thierry Budin, president and director general of Perrier-Jouet, in Epernay, will remain in their current positions. The deal is expected to close in July.
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