Penfolds Owner Treasury Wine Estates Buys Diageo Wine Concerns

Australian firm refocuses on growing premium wine category while spirits giant leaves wine behind
Oct 14, 2015

Treasury Wine Estates, a company many analysts left for dead not long ago, is continuing to try and reinvent itself. The Australian firm born when Foster's divorced its wine division has agreed to acquire the majority of Diageo’s U.S. and U.K. wine interests for $600 million. The deal, which is expected to close within three months, covers brands such as Beaulieu, Sterling, Provenance, Rosenblum, Acacia and Hewitt, among others.

The purchase price includes $552 million in cash and $48 million from the assumption of capitalized leases.

Diageo began to exit the wine business during the 2008 recession, and its U.S. wine division, Chateau & Estate, grew sales by just 2 percent by volume last year, according to Impact Databank. For the global drinks giant, the deal is a chance to leave the unpredictable wine market behind and focus on spirits and beer.

For Treasury, the acquisition dovetails with CEO Michael Clarke’s plan to increase the company’s focus on premium wines. Treasury says the acquisition will immediately double its premium sales in the Americas. According to Impact Databank, Treasury’s U.S. depletions reversed their previous decline last year, rising an aggregate 1.5 percent to 12.8 million cases, with growth led by Beringer, Matua and Penfolds.

For more on this deal and its impact on the wines on store shelves, read the full story at Shanken News Daily.

Winery Purchases and Sales News

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