Sydney | Reuters –– Australia’s Treasury Wine Estates, the world’s biggest standalone wine maker, said Wednesday it had agreed to buy most of Diageo Plc’s U.S. and British wine operations for US$552 million (C$716 million).
Treasury also announced a fully underwritten rights issue to raise around A$486 million (C$460 million) to fund the acquisition.
The company said the purchase of brands including Sterling Vineyards, Yellow Tail, Blossom Hill and Piat d’Or, as well as the Chateaux and Estate Wine business in the U.S., would immediately double its U.S. luxury and “masstige” — that is, mass prestige — net sales revenue.
“Wine is no longer core to Diageo and this sale gives us greater focus,” Diageo CEO Ivan Menezes said in a separate release Wednesday.
Diageo’s remaining wine businesses include Justerini and Brooks Wine Merchants, the Argentinian wine business of Navarro Correas, the wine brands of Mey Icki and USL, the Chalone brand and assets, and the Acacia winery and vineyard.
— Reporting for Reuters by Jane Wardell. Includes files from AGCanada.com Network staff.