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Published on : Oct 15, 2015

Some of the popular American wine brands and Beaulieu Vineyards may soon have a new parent company.

Diageo, the alcoholic beverage giant has plans to sell most of its United Kingdom and U.S. wine operations an Australia based company. The deal which is expected to close at US$ 552 mn and Treasury Wine Estates, will be the new holding company of the operations.

The deal would include Chateau and Estate Wines of Diageo that is based in the U.S., featuring well-known brands such as Beaulieu, Acacia, Hewitt, Sterling Vineyards, and Provenance. The deal also include Treasury Wine Estates to acquire Blossom Hill, which is the second –largest wine brand in the U.K. by volume.

However, the transaction is subjected to regulatory approvals, which includes an U.S. anti-trust review that may take three months to be finalized.

Diageo has described the deal to be part of the expansion plan of the company to focus on its core business. Diageo’s strategic global brands include Smirnoff, Baileys, Guinness, Johnnie Walker, Captain Morgan, and Tanqueray.

Diageo’s strategy is to steer for a strong and sustained performance, focusing on the core portfolio and the announcement that is made is just another element for the action strategy. This was stated by the company CEO in a statement that was released about the sale. He further stated that wine is no more the focus of Diageo, and the sale has enabled greater focus for the company.

As stated by the CEO of Treasury Wine Estates, the deal is expected to transform the U.S. business of the company into a larger scale player in the market for high growth