The encyclopedia · Finance & Accounting · Financial decision · 2005–2006
Taittinger's Family Sold the Champagne House to a Hotel Fund, Then Paid to Buy It Back
A family vote bundled Taittinger champagne into a bigger 2005 sale; the family spent a year and $850 million clawing just the wine house back.
Taittinger · Starwood Capital Group · Credit Agricole
HearsayWidely repeated, no document to show. Read it for the lesson, not as fact.
What it means today
Before letting a shareholder vote bundle a founder-brand into a larger sale, check whether the people voting actually run the part you'd regret losing — and what it would cost to buy it back.
What happened
Taittinger's holding company, Societe du Louvre, was never just champagne — it also owned luxury hotels (the Crillon, the Lutetia) and Baccarat crystal, and its shares were split across roughly 38 family heirs, most with no role in running the wine business. In July 2005 a majority of those shareholders voted to sell the whole group to the American fund Starwood Capital. Pierre-Emmanuel Taittinger, then running the champagne house, opposed the sale and was outvoted.
Champagne is not the same asset as a hotel or a crystal brand. It runs on reserve stocks, long ageing and a house style built over decades, all of which need an owner willing to wait years for a return. The trade's fear when a real-estate and hospitality fund took over a top champagne name was that patience would be the first thing cut once quarterly numbers mattered.
The fear proved almost beside the point. Starwood had bought the group for its hotels, and within months it signaled it wanted the champagne division gone. Bernard Mary, a regional Credit Agricole banker, arranged financing so Pierre-Emmanuel's branch of the family could bid. In 2006 they won the champagne house and its vineyards back against roughly 40 other bidders for about $850 million, with the bank retaining a minority stake.
The family kept the name, but a year of ownership by an outside fund and the price of reversing it are what the champagne trade still tells the story for: a wine house's fate was set by a vote among relatives who mostly didn't work in it, and getting it back cost far more than not selling it would have.
Why it happened
- About 38 family heirs across branches, most with no day-to-day role in the champagne business, held the vote that decided its fate
- Champagne, hotels and crystal were sold together as one holding company, so keeping the wine business required either blocking the whole deal or losing it outright
- The buyer's core business was hotel real estate, so it had no reason to keep the champagne division once the group was broken apart
- Reclaiming a house the family had just sold meant outbidding roughly 40 other buyers a year later, at a price set by the open market rather than a family discount
The lesson
A vote among relatives who don't run the business can decide the fate of the one asset that most needs patient ownership — and undoing that vote costs far more than never taking it would have.
Aftermath
Pierre-Emmanuel Taittinger became chairman of the recovered champagne house, with his branch of the family holding about 55% and Credit Agricole du Nord Est the rest. His daughter Vitalie Taittinger later took over as president, and the house is cited in wine-trade retrospectives as the case for keeping a family's core asset out of a diversified holding company's sale.
Sources
- Wine Spectator — Keeping It in the Family
- Le Journal du Dimanche — Champagne: le succes petillant de la famille Taittinger
spotted an error? The club wants to know.