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British drinks group Diageo is planning an audacious "Black Velvet" takeover, with the giant behind Guinness putting in a bid to buy the owner of champagne houses Krug, Dom Perignon and Moët et Chandon.
Diageo has reportedly offered to buy Moët Hennessy, the wines and spirits arm of LVMH, the French luxury goods group, for €12 billion (£10.7 billion).
The deal would create one of the world's greatest corporate drinks trolleys, merging Diageo's portfolio, which also includes Smirnoff vodka, Johnnie Walker whisky, Baileys liqueur and Captain Morgan rum, with LVMH's upmarket portfolio. In addition to its most prestigious champagne labels LVMH owns the bubbly houses of Veuve Clicquot, Mercier and Ruinart, the legendary Sauternes vineyards of Chateau d'Yquem, Hennessy cognac and Glenmorangie whisky.
The City immediately dubbed the would-be merged company Black Velvet, after the "cocktail" made up of Guinness and champagne especially beloved of winning horseracing punters at Cheltenham.
Neither company was today denying that informal talks have taken place.
