The cash payment of US$600 million comprises $US552 million plus the assumption of capitalised leases of US$48 million.
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’s Chief Executive Officer, 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 FY15.
“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.
The acquisition is subject to certain regulatory approvals, including anti-trust approval in the US, and is expected to complete in approximately three months.