Sogrape Expands to Spain, Buying Bodegas LAN
Portugal's largest wine company buys a leading Rioja winery
Portugal's largest wine company is expanding to Spain. Sogrape has announced that it has purchased Bodegas LAN, a Rioja producer known for high-quality wines. The purchase price was not disclosed, but reliable sources estimate that it's between $60 million to $72 million. With the sale, Sogrape becomes one of the five largest wine companies, by volume, on the Iberian peninsula.
Sogrape owns several prominent brands, including Mateus Rosé and Barca Velha, as well as Port lodges Ferreira, Offley and Sandeman. Founded in 1942, Sogrape grew rapidly, largely thanks to Mateus Rosé. In 1987, it began the first of several major purchases, acquiring Casa Ferreira. It moved abroad in 1997, buying Argentinean winery Finca Flichman. Today it also owns wineries in Chile and New Zealand.
Bodegas LAN was founded in 1972 and is currently owned by private equity firm Mercapital. Headquartered in Fuenmayor, in Rioja Alta, the winery specializes in red wines and produces almost 400,000 cases annually. It made $24 million in revenue last year. With 260 acres of vineyards, LAN produces wines from Rioja, Rías Baixas and, more recently, Rueda and Ribera del Duero. Rioja wines represent 90 percent of production. The winery has been included in Wine Spectator's Top 100 list twice.
Sogrape management has been looking for a Spanish property for some time, as a part of the strategy of expansion in Europe. This will allow Sogrape to “enter one of the main European wine-producing countries, smaller only than France and Italy, thus strengthening its international position and enriching its range with prestigious Rioja wines,” said Sogrape’s CEO Salvador Guedes. Moreover, “LAN has the right dimension, it's a recognized player, very relevant in the Spanish market, and already exporting 30 percent of its production.”
Guedes told Wine Spectator that the staff of Bodegas LAN will remain. CEO Enrique Abiega will continue to lead the company, and Maria Barúa and Luisa Freire will remain chief winemakers.
Mercapital purchased LAN in 2002. According to Eusebio Martín, one of the firm's partners, “Mercapital has to rotate the portfolio, so we would have liked to sell Bodegas LAN sooner. However, with the crisis of the domestic market and decrease of results, the moment was not right. So, we developed the brands. Bodegas LAN is now a solid company and a great investment.”
