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United Breweries retreat from Tattinger bid
Stiff resistance from local groups in France behind UB’s decision to drop $600 million bid for the French Champagne group.
BY A CORRESPONDENT
May 30, 2006
Vijay Mallya’s United Breweries group, India’s biggest distiller, has reportedly backed off from its plans to buy Taittinger, the French champagne group, following stiff resistance from France-based groups who have placed revised offers to thwart UB’s French foray.
UB had reportedly offered $660 million for the French Champagne firm.
A company spokesperson in Bangalore confirmed that UB was backing out of the Tattinger bid as it felt that to outbid the local bids was not a viable option.
Earlier French media had reported that Belgian tycoon Albert Frere was toying with the idea of bidding for Taittinger after backing out in April from an earlier offer.
There have been widespread opposition to the idea of UB acquiring Tattinger in the French champagne industry.
Reports said Credit Agricole du Nord Est, a French bank, has also put up a higher bid with the aim of thwarting United Breweries’s chances to buy out Tattinger.
The Bangalore-based United Breweries dominates the Indian market with a 60 per cent share in India’s spirit market. UB is also the third largest spirit producer. UB group also owns Kingfisher, an airline and runs the beer brand with the same name which is the market leader in India’s lager beer segment.
Taittinger , which was bought by United States-based Starwood Capital in July, 2005, is expected to announce the winning bidder early next month.
Wine professionals in France had expressed concern over the Indian firm's bid and questioned its long-term intentions, with some seeing it as a threat to the French system of locality-based appellations for wine.
The Interprofessional Committee of Champagne Wines (CIVC) had expressed reservations about UB’s Tattinger bid, questioning its “long-term intentions.”
The CVIV had also said India as a country does not respect the “principle of controlled origins for wines."
Taittinger, which ranks among the top ten producers of champagne, sells 4.5 million champagne bottles annually. The company estimates that 62.5 percent of its sales come from abroad (outside France).
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