Sonoma's Buena Vista Winery May Be Sold to Allied Domecq

Tim Fish
Posted: May 8, 2001

Global wine and spirits giant Allied Domecq is in final negotiations to buy Sonoma County's Buena Vista Winery, with a reported $86 million offer on the table. The sale would include the Buena Vista and Haywood brands, Buena Vista's main winery in Carneros, and the historic cellar and visitor center in Sonoma.

Sources familiar with the negotiations, who asked to remain anonymous, said Buena Vista's owners and London-based Allied Domecq are now down to only a few details before signing. "It's in the ballpark," said one person.

Allied Domecq spokesman George Rose confirmed that the two companies were in negotiations but declined further comment. The Racke family, which owns Buena Vista, issued a statement: "We have not entered into an agreement. There has been nothing signed."

Allied Domecq's main goal in purchasing Buena Vista is to gain control of some 750 acres of prime Carneros vineyards, one source said. Those grapes could be used to expand production of several Allied Domecq wines, including Clos du Bois in Sonoma County and Atlas Peak Vineyards and William Hill Winery in Napa Valley. If the Rackes accept the offer, Allied Domecq plans to take the Buena Vista brand upscale, downplaying its $8 to $10 wines from the broad California appellation in favor of a strict focus on Carneros fruit.

Founded in 1857 by wine pioneer Agoston Haraszthy, Buena Vista was the first bonded winery in California. The Rackes bought Buena Vista in 1979, and it produced some very successful wines, but quality became inconsistent as the winery grew. The Racke family put the winery on the market last year, in order to concentrate on a new high-end Carneros winery called The Donum Estate, which is in the planning stages.

If Buena Vista sells for $86 million, it would be one of the highest prices paid for a Sonoma County winery, in a prominent selling spree that began in July 1998 with Fortune Brands' purchase of Geyser Peak Winery for $101 million. Other high-profile purchases include Constellation Brands' April buyout of Ravenswood Winery for $148 million and its 1999 acquisition of Simi Winery for $55 million. In 2000, Robert Mondavi Winery paid $45 million for Arrowood Winery and Kendall-Jackson founder Jess Jackson spent $45 million to add Matanzas Creek to his Jackson Family Farms portfolio.

Allied Domecq, one of the largest wine and spirits producers in the world, continues to seek new acquisitions and is a prominent force in the ongoing industry consolidation. Its portfolio currently includes Ballantine's Scotch, Beefeater, Canadian Club, Cockburn's Port, Courvoisier, Harveys Bristol Cream, Kahlua and Maker's Mark.

Allied Domecq is routinely cited as a potential suitor in rumored winery sales. Last year, the company considered purchasing Seagram's wine holdings, but instead paid $508 million for two Champagne houses: G.H. Mumm and Perrier-Jouët. It was also considered a front-runner in the bidding for Kendall-Jackson but has reportedly stepped away from negotiations, convinced that Kendall-Jackson's asking price -- estimated to be around $1.5 billion -- is too steep, a source said.

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Check out recent ratings of BuenaVista and Haywood wines.

Read more about Buena Vista:

Nov. 10, 2000
California's Historic Buena Vista Winery Put Up for Sale

Nov. 15, 1997
Buena VistaCelebrates 140th Anniversary With a Vintage Costume Ball

Read more about Allied Domecq:

Feb. 13, 2001
Allied Domecq Concedes Defeat in Battle for New Zealand's Montana Wines

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

Read more about recent acquisitions:

April 10, 2001
Sonoma'sRavenswood Sold for $148 Million to Constellation

July 13, 2000
Mondavi Buys Arrowood for $45 Million

March 13, 2000
Jess Jackson Buys Sonoma's Matanzas Creek

April 2, 1999
LVMH Sells Simi to Canandaigua for $55 Million