One of the world’s largest publicly-listed winemaking and distributing firms, Australia’s Treasury Wine Estates (TWE), is purchasing the majority of the British multinational alcoholic beverages company, Diageo, for $552 million. According to the North Bay Business Journal, the sale includes several Napa County brands under the Diageo umbrella including Beaulieu Vineyards (BV), Sterling Vineyards, Acacia, Provenance Vineyards and Hewitt Vineyard. Diageo is reportedly selling the wine brands as part of a shake up of its business. TWE is already behind some 80 brands, including wines from Australia, California, New Zealand and Italy, and has more than 11,000 hectares of owned and leased vineyard holdings around the world.
“This acquisition will transform our U.S. business into a larger player of scale in the attractive luxury and masstige* segments of the high growth U.S. market,” said Michael Clarke, Treasury’s CEO, in a statement. “The additional supply of luxury and masstige wine will be a game-changer for our U.S. brands, providing us with an immediate opportunity to step-change our growth in the U.S., Canada, Asia and Latin America.”
“Wine is no longer core to Diageo and this sale gives us greater focus,” explained Diageo chief executive Ivan Menezes. “With the completion of this transaction Diageo will have released $1 billion from the sale of non-core assets since the start of the financial year.”
Besides owning the Napa County brands mentioned above, Diageo owns Johnnie Walker, Smirnoff vodka and Guinness among others and the popular commercial UK wine brand Blossom Hill, which is included in the deal.
TWE plans to pay for the purchase in part by issuing new shares.
Besides investing in new shares of TWE, if you are thinking of purchasing Napa Valley Real Estate, please contact me at 707-738-4820 or email [email protected]. As a top producing Realtor® in this area, I have access to some extraordinary wineries, vineyards, estates and homes that are not on the open market.
*“Masstige” is a marketing term for products positioned as prestigious yet priced to be affordable in mass-market venues.