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Allied Domecq to Buy Top Napa Sparkling Wine Estate

Mumm Cuvée Napa is part of $845 million deal.

Tim Fish
Posted: February 27, 2002

Global wine and spirits giant Allied Domecq will buy sparkling wine producer Mumm Cuvée Napa as part of a $845 million deal to acquire the popular Malibu rum brand from fellow industry giant Diageo.

While the sale of Mumm Cuvée Napa was something of a surprise, the Malibu deal had been expected. Diageo was required by the U.S. Federal Trade Commission to divest itself of the rum brand as part of its purchase of Seagram's wine and spirits business in December, which includes Napa Valley's Sterling Vineyards, among others.

Allied Domecq already owns the French Champagne brands G.H. Mumm and Perrier-Jouët, and the purchase of Mumm Cuvée Napa allows the company to "clear up some trademark issues," said Allied Domecq spokesman George Rose.

Seagram once owned all three brands, but the company sold G.H. Mumm and Perrier-Jouët in June 1999 for $310 million to U.S. private investment firm Hicks, Muse, Tate & Furst. A few months later, Allied Domecq paid roughly $508 million for the same brands.

"Mumm as a wine brand in California was something we were keen to have and it fits our overall wine business," said Jane Mussared, a London-based spokeswoman for Allied Domecq. Details of the sale are still being worked out, Mussared said, and will need final FTC approval. The deal includes the winery, brand and wine stock.

Separating Mumm Cuvée Napa from its sister winery Sterling Vineyards -- they share significant winemaking and administrative staffs -- may be a challenge, although Diageo has been extensively restructuring its California wine organization in recent months. The wineries have also shared vineyard resources, including the prime Winery Lake tract in the Carneros district. It was not known at press time which company would control the vineyard.

When London-based Diageo bought the Sterling, Tessera, The Monterey Vineyard and Mumm Cuvée Napa brands in the Seagram deal in December, it already owned California's Beaulieu Vineyard, Blossom Hill and Glen Ellen wineries, along with beer and liquor brands such as Guinness, Johnnie Walker and Tanqueray.

Allied Domecq has been on a buying spree. Last year, it paid $85.5 million for Sonoma's Buena Vista Winery and Haywood brands and $256 million for Bodegas y Bebidas, one of Spain's largest wine producers. In August, it won a high-profile battle with Australian brewer Lion Nathan to gain control of Montana Wines, New Zealand's largest wine producer.

One of the largest wine-and-spirits companies in the world, Allied Domecq also owns Clos du Bois Winery, Atlas Peak Vineyards and Callaway Vineyard, and its portfolio includes liquor brands such as Beefeater, Canadian Club, Courvoisier, Kahlua and Maker's Mark.

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Read more about Allied Domecq and Diageo:

  • Dec. 20, 2001
    FTC Clears Sale of Seagram's Wine and Spirits Division

  • Oct. 24, 2001
    Sale of Seagram's Wines and Spirits Blocked by U.S. Regulators

  • Sept. 17, 2001
    Allied Domecq Buys Giant Spanish Wine Producer

  • Aug. 27, 2001
    Allied Domecq Triumphs in Fight to Buy New Zealand's Montana Wines

  • July 9, 2001
    Allied Domecq Purchases Two Wineries in Argentina

  • June 29, 2001
    Deal Sealed for California's Historic Buena Vista Winery

  • Feb. 28, 2001
    Seagram's Wines and Spirits Sold for $8.15 Billion

  • Dec. 13, 2000
    Allied Domecq Buys Mumm and Perrier-Jouët Champagne Houses">
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