Laroche and Jeanjean to merge

Two of France’s best-known wine groups will merge next year. The decision is said to be in the form of “merger by absorption of Laroche by Jeanjean”, a move which will see Jeanjean swallow Laroche’s net debt of E28 million.

At Laroche, producer of wines in Chablis, the south of France, Chile and South Africa, Michel Laroche, chairman of the company’s executive board, said: “In the current difficult economic climate, the proposed merger with Jeanjean offers us exceptional growth perspectives.

"The pooling of our skills will provide us with the means to continue our development of premium brands, both in France and internationally.”

The merger is subject to approval by the French financial markets authority (AMF). Once the merger document is submitted to the AMF, the share price of each company will be determined, at this stage the proposed parity is 1 Jeanjean share for 2.3828 Laroche shares.

The merger will result in total vineyard holdings of 1,450 hectares, which is said to provide an annual turnover of E200m, 50% of which will come from international markets.

The new company, which is yet to be named, will provide a number of cost savings and will create a joint sales and marketing team comprising of about 80 people.

Chairman of the Jeanjean executive board, Antoine Leccia, said: “The merger is in line with the current towards increasing levels of consolidation in the French wine industry.

"Equally, it is an essential step towards meeting future challenges in the international wine world. It will support the Jeanjean Group’s development strategy of moving towards premium wines.”

Both the Laroche Group and Jeanjean Group are quoted on the Nyse-Euronext market in Paris.

Jane Parkinson, 28.09.2009