Australia’s Treasury Wine Estates (TWE) is to acquire the majority of assets from Diageo’s US and UK wine operations.
The cash payment of $600m comprises $552m plus the assumption of capitalised leases of $48m.
The acquisition of Diageo’s wine operations complements TWE’s established business strategy, and allows the company to replicate its focus on efficiency, investment in marketing and positive transformation.
Key US brands to be acquired include well-known brands Beaulieu Vineyards, Sterling Vineyards, Acacia, Provenance and Hewitt, amongst other assets.
TWE CEO Michael Clarke said: “This acquisition will transform our US business into a larger player of scale in the attractive Luxury and Masstige segments of the high growth US market. The additional supply of Luxury and Masstige wine will be a game-changer for our US brands, providing us with an immediate opportunity to step-change our growth in the US, Canada, Asia and Latin America.”
TWE will also acquire the Blossom Hill wine brand in the UK, the second largest wine brand in the UK by volume and value in the financial year 2015.
“The acquisition of Blossom Hill in Diageo’s UK wine business will provide us with the scale and critical mass to deliver enhanced value creation from our combined Commercial businesses by accelerating our separate focus on the Commercial portfolio, globally,” said Mr Clarke.
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