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Lion Nathan Takes Majority Stake in Petaluma of Australia

The Australian brewer has shareholder agreements for 56 percent of the wine producer.

Jacob Gaffney
Posted: November 1, 2001

Bucking speculation that it would end up in a bidding war over Petaluma Ltd., brewer Lion Nathan announced that it has acquired a majority stake in the publicly held Australian wine producer.

As of today in Australia, the company now has agreements for 56 percent of Petaluma and has received approval from Australia's Foreign Investment Review Board, according to Warwick Bryan, director of investor relations for Lion Nathan, which owns breweries in Australia, China and New Zealand.

In early October, after previously losing out in a struggle for control over New Zealand's Montana Wines, Lion Nathan made an unexpected takeover bid for Petaluma. The producer owns Australian wineries such as Petaluma, Mitchelton, Knappstein and Stonier's, as well as Argyle, an Oregon winery that makes some of the state's best sparkling wines, Chardonnays and Pinot Noirs.

Petaluma also has a joint venture with Washington-based wine group Stimson Lane, owner of Chateau Ste. Michelle and Columbia Crest, to make Bridgewater Mill wines in Australia and market them in the United States. Lion Nathan has said that continuation of this agreement is key to the deal.

Last week, on Oct. 22, Lion Nathan had upped its original Oct. 2 offer for Petaluma from A$7 per share to A$7.27 (US$3.64), making the Australian producer worth around A$229 million (close to US$115 million).

The increase in Lion Nathan's offer fueled reports that other large wine-and-spirits companies, such as London-based Allied Domecq and Diageo, were considering making a bid for control of Petaluma. Officials from both Allied Domecq and Diageo would not comment on any possible future acquisitions, but downplayed their interest in Petaluma.

By Oct. 24, Lion Nathan declared that it had received agreements for 16.1 million shares of Petaluma, representing 50.7 percent of the company. And Petaluma CEO Brian Croser and the other founding shareholders of Petaluma had accepted the higher offer, according to Bryan.

In a corporate statement, Petaluma director Chris Roberts endorsed the Lion Nathan bid: "The board of Petaluma is confident that the increased offer is in the best interests of all our shareholders, employees, customers and suppliers. All of the directors of Petaluma intend accepting the increased offer with respect to all their personal holdings. The board recommends that all shareholders accept the offer as soon as possible."

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Check out ratings of Argyle, Bridgewater Mill, Mitchelton, Petaluma and Stonier's wines.

Read more about Petaluma:

  • Oct. 2, 2001
    Brewer Makes Takeover Bid for Australia's Petaluma Winery

  • July 18, 2000
    Australian Wine Company to Buy Premium Oregon Winery

  • Dec. 23, 1999
    Stimson Lane Expands Global Reach With Australian Venture

    Read more about Lion Nathan:

  • Oct. 2, 2001
    Brewer Makes Takeover Bid for Australia's Petaluma Winery

  • Aug. 27, 2001
    Allied Domecq Triumphs in Fight for Montana Wines
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