Diageo completes $552m sale of wine interests
Published 05/01/2016 | 02:30
Irish-listed drinks company Diageo announced yesterday that it has completed the sale of its major wine interests in the United States and the UK to Australian vintner Treasury Wine Estates.
The Guinness-maker, which is based in the UK, announced in October that it had agreed to sell US-based Chateau and Estate Wines and the UK-based Percy Fox businesses for $552m (€507m).
Diageo plans to use net proceeds of about $489m after tax and transaction costs to repay borrowings.
At the time of the initial announcement Treasury said the purchase of brands including Sterling Vineyards, Yellow Tail, Blossom Hill and Piat d'Or as well as the Chateaux & Estate Wine business in the US would immediately double its luxury net sales revenue in that country.
For Diageo the sale is part of a broad shake-up under chief executive Ivan Menezes. Mr Menezes previously said that wine is "no longer core" to the company's strategy, which is to focus more on spirits and beer.
In November, Diageo announced it was also selling its Argentine wine business including its Navarro Correas and San Telmo brands to Gupo Peñaflor.