AXA Bids $73 Million for Paris Auction Business

March 25, 2002

France AXA Group hopes to acquire the Hôtel Drouot, the collective enterprise that runs Paris’ famous art auctions, and has bid € 82 million ($72.8 million) to for its property assets and publishing rights.

Drouot’s origin go back to the middle ages, when the first decrees were issued by French kings to conduct sales of property. Until recently it operated as a closed shop under a complicated and archaic system of patents and inheritance rights, codified by French law which gave the “Commissaires-Priseurs,” as they’re known locally, a virtual monopoly on the auction business, notably in the fine arts.

At the insistence of Common Market regulators, France began to dismantle the system several years ago. Drouot now faces competition from other EU based auction enterprises, notably the two U.K. giants, Sotheby’s and Christie’s, who dominate the business.

AXA’ isn’t exactly a newcomer to the fine arts business. Its New York-based AXA Nordstern Art Insurance Corporation subsidiary is one of the world’s leading fine arts insurers.

The company’s bid for Drouot tops a previous offer of €68.6 ($61 million) made by Barclay’s Private Capital last January. Its seeking to acquire all of the leases and the publishing interests controlled by Drouot’s holding company.

Most analysts feel that without its monopoly position, Drouot would be at a severe competitive disadvantage, unless it receives strong financial backing. Axa can certainly provide that, plus, as a French company, it would salvage national pride in preserving a Parisian institution.

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