News: Mallya may taste French wine assets, after all

(DNA 17/06/2006) Bangalore - Over a fortnight after it backed out from a bid to acquire French champagne maker Taittinger, Vijay Mallya-controlled United Breweries Group is all set to buy a French wine company from Starwood Capital Group LLC for $15 million in cash.

DNA Money had reported on May 22 that Mallya was bidding for this winery.

UB will buy the wine company in the "next few weeks," Mallya told reporters, adding, the acquisition would be funded from internal accruals.

"The acquisition will get UB into high quality wines that we will import and sell in Indian market," he added.

The wine assets are also part of the Taittinger Group, which holds a champagne house that Mallya unsuccessfully sought to acquire. Starwood had bought Taittinger and Societe du Louvre SA last year for their real estate and hotel assets.

On whether UB was still in the race for acquiring the champagne assets of Taittinger, Mallya said, "We bid but Credit Agricole du Nord-Est was the winning bidder. There is a sentiment that champagne assets should remain in French hands. So, we gracefully bowed out of the process. I am not prepared to get into a bidding war because that would have diluted shareholder value of UB Group. That was something I was not prepared to do."

The UB Group, which has relied on acquisitions to expand market share, wants expertise and brands bought overseas to win more discerning customers at home.