Jay-Z with six bottles of Armand de Brignac in hand.
Jay-Z has sold half of his Armand de Brignac champagne (commonly known as “Ace of Spades”) to Moët Hennessy, about 66 percent of which belongs to Paris-based conglomerate LVMH.
The 50 percent buyout came to light this morning, in a general release from the Roc Nation founder Jay-Z and Moët Hennessy. For background, Jay-Z reportedly paid $200 million in 2014 to increase his stake in the high-end champagne to 100 percent, following a series of smaller investments following the brand’s 2006 launch. And as mentioned, approximately two-thirds of Moët Hennessy belongs to LVMH.
The latter conglomerate also possesses Dom Pérignon, Marc Jacobs, Tiffany’s, and Louis Vuitton, to name just some subsidiaries. Moreover, Moët Hennessy and Diageo – the London-headquartered company that dropped a staggering $1 billion ($700 million upfront, with the remaining $300 million tied to performance benchmarks) on George Clooney’s Casamigos tequila in 2017 – took a cross holding in one another back in 1994.
LVMH sold its stake in Diageo some years ago, but the latter continues to hold a 34 percent or so interest in the French alcoholic-beverages company. According to the release published by Jay-Z and Moët Hennessy, Armand de Brignac has proven a “worldwide success” thus far, including more than 500,000 bottles sold in 2019. (For reference, a bottle of the Ace of Spades Brut Gold will set one back about $300.)
The champagne’s sales most likely slipped in 2020 due to lockdown measures and large-gathering bans – as part of an overall decline in the alcohol market. But the release doesn’t pinpoint exactly how much Ace of Spades was consumed last year, nor does it disclose the financial terms of Moët Hennessy’s 50 percent acquisition.
Nevertheless, the 50-50 split “is an essential element of this alliance,” per the text, and the transaction encompasses “a global distribution agreement” that could result in the champagne’s reach expanding once the pandemic is in the rearview.
Addressing the deal in a statement, Jay-Z said: “I’m proud to welcome the Arnault family into ours through this partnership that began with Alexandre Arnault and continued with his father Bernard Arnault and Philippe Schaus, at my home in Los Angeles. It is a partnership that has felt familiar the entire time.
“We are confident that the sheer power of the Moët Hennessy global distribution framework, its unparalleled portfolio strength and its long-established track record of excellence in developing luxury brands will give Armand de Brignac the commercial power it needs to grow and flourish even further.”
Worth noting in conclusion is that Jay-Z’s 50 percent Armand de Brignac selloff arrives about two months after rumors suggested that he may sell his Tidal streaming service to Jack Dorsey’s Square. The points could be indicative of a broader effort from Jay-Z to cash in on his holdings; while he and Dorsey have yet to announce a deal for Tidal, they partnered on a multimillion-dollar Bitcoin development fund about 10 days back.