LONDON (Reuters) - Diageo’s (DGE.L) Chief Executive Paul Walsh said on Thursday he would be interested in buying the 66 percent of champagne and cognac house Moet Hennessy that the British group does not own, if available at the right price.
Earlier this year, reports emerged that Diageo was looking to buy the 66 percent stake from owners LVMH (LVMH.PA) for over 10 billion euros ($14.24 billion) to gain 100 percent control, but the Paris-based group denied being in talks to sell the stake.
“If ever the 66 percent stake was available we would be interested. At the right price, yes, we would be interested,” Walsh told a news conference after Diageo’s annual results.
Diageo’s links with LVMH go back over two decades and currently it holds 34 percent of the group selling the world’s top-selling champagne and cognac brands, while the two companies share distribution links in some parts of the world.
Many analysts say the deal would be an excellent strategic fit, but question whether LVMH Chairman Bernard Arnault is willing to sell, and are concerned that Diageo may pay too high a price to gain full 100 percent control.
Diageo shares were off 4.2 percent at 654-1/2 pence at 1430 GMT (10:30 a.m. EDT) after it trimmed its profit growth outlook for the current year and said it only sees recovery in 2010 at the earliest.
Reporting by David Jones; editing by Rupert Winchester