PARIS: Starwood Capital Group LLC of the United States has reached an agreement with the French hotel and champagne group Taittinger to buy out its business in a deal worth about €1.2billion (£834m).

The US property and hotel investment group will now own the 14 luxury hotels that were the pride of the Taittinger group. These hotels include the Crillon and the Lutetia in Paris as well as the Martinez in Cannes. Starwood also gains control over the Campanile and Première Classe economy chains. The group said that its main interest was in the Société du Louvre, the second-largest hotel network in Europe rather than the champagne business of Taittinger. Hence, Starwood would sell that arm of business as soon as it found appropriate buyers. To this effect, Barry Sternlicht, Starwood’s chairman and chief executive sought help to find buyers for the champagne business, “We welcome the Taittinger family’s advice and counsel as we work to ensure that the company’s prized champagne business finds an appropriate home,” he commented.

However, as a part of the deal, the Taittinger family could try to buy back the champagne business if it felt inclined to do so. However, there would be a race with drinks group Pernod Ricard, which has evinced an interest in the champagne business.

Starwood has brought 65 per cent of Groupe Taittinger under which it also gets a 44 percent stake in the hotel business. The group said that it would also launch a bid to buy out the remaining shares from firms, which are listed in Paris.

The Société du Louvre has also got a majority stake in Baccarat crystal, the luxury goods brand. Commenting on the future plans for the hotel chain, Mr. Sternlicht said, “We look forward to building on the company’s proud heritage by growing its economy hotel business in France and into new markets, particularly Eastern Europe.” It is rumored that he is planning to invest €100 million in order to upgrade the 14 luxury hotels.