The latest push into the US by Australian wine supplier Treasury Wine Estates (TWE) is a grab for grapes.
TWE is buying most of the US and UK-based wine operations of drinks giant Diageo for $US552 million and taking on leases of $US48 million – a total of $US600 million.
TWE will tap investors for $A486 million through a share issue to help fund the deal.
TWE owns the Penfolds, Wolf Blass, Lindeman’s and Rosemount Estate labels in Australia, and Beringer Vineyards, Chateau St Jean and Etude in the US.
The acquisition of Diageo wines will add key US brands including Beaulieu Vineyards, Sterling Vineyards, Acacia, Provenance and Hewitt.
TWE will also get the commercial wine brand, Blossom Hill, in the UK.
Blossom Hill is the number two wine brand in the UK by volume and value.
TWE chief executive Michael Clarke says the Diageo wines acquisition is a game-changer for TWE in the US market – the biggest wine market in the world.
