By Andy Young, editor TheShout
Treasury Wine Estates has announced it has spent US$600 million to acquire the majority of assets from Diageo's US and UK wine operations.
Key US brands to be acquired include the Beaulieu Vineyards, Sterling Vineyards, Acacia, Provenance and Hewitt, amongst other assets. Diageo’s US wine business comprises approximately four million cases of wine for FY15, with a strong representation in the key luxury and masstige segments.
TWE will also acquire the Blossom Hill wine brand in the UK. Blossom Hill is one of the leading wine brands in the UK by volume and value in FY15. Diageo’s UK wine business comprises approximately five million cases of wine, sold in both Great Britain and in 28 international markets in FY15.
In a statement about the deal TWE said the deal is "compelling for TWE's shareholders," adding it "expects that approximately 75 per cent of gross profit from the acquired Diageo Wine business will be luxury and masstige".
TWE also said that the deal means it avoids US$80m of capital investment that would have been required to replace its existing leased bottling facility in the US.
TWE's CEO Michael Clarke will be speaking to investors and media about the deal later today.