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Chateau Lascombes Is Sold To French Insurance Company For $280 Million

July 11, 2011

U.S. private equity group Colony Capital has sold Chateau Lascombes to French insurance company Mutuelle d’Assurances du Corps de Santé Français (MACSF) for €200 million, or around $280 million. Colony had been the owner of Lascombes since 2001, when it acquired the Bordeaux second growth for $69 million.

“We’re very impressed with the investments by Colony and will continue what they started,” Marcel Kahn, CEO of MACSF, told Wine Spectator. When Colony purchased Lascombes, the Margaux property needed a drastic overhaul. The company spent several million dollars to build a four-level, gravity-fed cellar and to expand the vineyards from 208 acres to 291 acres. (Lascombes also includes a further 15 acres in the Haut-Médoc.) The wine’s prices have increased, at least partly due to improved quality. The 2000 vintage was released at €22 euros ($31) a bottle as futures; the 2010 vintage (which received a preliminary score from Wine Spectator of 89 to 92 points during a barrel tasting) was recently released for €72 ($100), a 227% increase. Dominique Befve, the current general manager, is to remain at the estate.

This is the first move in the wine industry for MACSF, which recently determined that it had $560 million worth of “space” in its asset portfolio to acquire real estate. “When you manage assets today, you have a scary landscape,” said Kahn. “You have no idea what stock prices will do. You need to invest in something solid. Château Lascombes is in Bordeaux, in Margaux. There is a limited supply and increasing demand.” Lascombes is well distributed in the United States and China with about 40% of its production going to the United States and another 30% to Asia. “China is increasing its demand for Margaux,” said Kahn. “The stock in the cellars is worth $70 million,” he said, confident their investment “could become profitable very quickly.”

MACSF, which has an annual turnover of roughly $3 billion, made the purchase without financing. Lascombes will comprise just 1% of MACSF’s assets. The company considers this a long-term venture. “Time is a key point when you invest in a château. You need time,” said Kahn. “We are providing eternity.”

Lascombes has had a long history of twists and turns. It was once owned by legendary Bordeaux figure Alexis Lichine, who acquired the property in the early 1950s and undertook a major renovation and expansion of the vineyard holdings. Lichine sold control of Lascombes to British drinks firm Bass Charrington in 1971, after which quality is generally considered to have declined for a period of time. Colony’s investments after acquiring Lascombes in 2001 are widely credited with producing yet another era of prosperity.

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