Indian quest for bubbly house falls flat

The battle for control of Taittinger, the champagne house, has prompted India to hit out at the behaviour of the French during cross-border takeovers.

"The nationality of the bidder should not matter at all," Kamal Nath, the Indian Minister for Commerce, was reported as saying in the French media. "Such decisions [as Taittinger] should purely be taken on commercial grounds. Rolls-Royce was a British symbol - now it is a German-owned business and no one is concerned."

Christine Lagarde, the French Minister for Overseas Trade, hit back at Mr Nath's claims, however, saying: "Questions of investment are not decided by discrimination based on race, creed or colour, but only by shareholders."

Indian drinks giant United Breweries lost out in the bidding for Taittinger to Credit Agricole du Nord Est, the French bank, which offered $US660 million to owner Starwood Capital, a US buyout group. Credit Agricole provides 70 per cent of Tait-tinger's loans and enjoyed widespread local support, including the Taittinger family's.

Opposition to United Breweries was intense.

Growers in the Champagne region who supply grapes to Taittinger, which traces its roots to 1734, implied that they would not deal with the house if it fell into Indian ownership.

"We don't intend to sit idly by when we go from the hands of the cowboys into those of the Indians," one employee told French newspaper Le Figaro.

Bruno Paillard, a champagne industry spokesman, was quoted as saying: "There is concern. India does not respect the concept of appellations as practised in France."

United Breweries made wide-ranging promises on jobs and brand protection. A spokeswoman suggested to the New York Times that Taittinger had snubbed its $600 million offer after Credit Agricole had been pressured to raise its bid.

"The French alliance is going to buy Taittinger at a crazy price," she said. "It would not have been valuable to our shareholders to up our bid."

- INDEPENDENT