Australian industry giant Treasury Wine Estates has pounced to purchase a leading premium wine producer in California.
Treasury - which owns brands ranging from Penfolds and Wynns Coonawarra Estate to 19 Crimes and Squealing Pig - today announced that it has reached an agreement to acquire DAOU Vineyards.
The luxury wine business founded by brothers and co-proprietors Georges and Daniel Daou will command an "upfront consideration" of $US900 million, plus an additional earn-out of up to $100 million.
The press release says the "transformative deal will accelerate TWE's focus on a portfolio that is increasingly luxury-led with a greater presence in key growth markets such as the US".
Founded in 2007 and based in Paso Robles, California, DAOU is billed as the fastest-growing luxury wine brand in the US trade over the past year. It is known for its award-winning Cabernet Sauvignon-based Patrimony wines.
DAOU should prove a strong complement to TWE's existing portfolio in upper-luxury price points and fills a key portfolio opportunity for Treasury in the $20-40 range in the US, as well as strengthening its luxury portfolio in the $40+ range.
Tim Ford, the CEO of Treasury Wine Estates, said: "The US is the world's largest wine market and we're beyond thrilled to add DAOU to our portfolio, cementing our position as a global luxury wine leader.
"This is a transformative acquisition that will accelerate the growth of our luxury portfolio globally and paves the way for new luxury consumer experiences. DAOU is an award-winning luxury wine business with an outstanding track record for growth and we have grand plans for DAOU to become the next brand with the international scale and luxury credentials of Penfolds.
"With DAOU, we will be well-positioned to connect with a new generation of wine lovers, combining tradition with innovation, culture-led experiences, and global distribution."
"The last frontier has always been international, and as part of the Treasury Wine Estates portfolio, we have unlocked the potential to be amongst the highest-end wines for consumers to enjoy globally," said Georges and Daniel Daou, who will remain with the business.
"In Treasury Wine Estates, we have found a partner that not only understands the value of our brand and the premium assets we have cultivated but also the importance of ensuring that we maintain a relentless focus on quality and craftsmanship as we step into our future.
"Both companies are change leaders and by joining forces, we will continue to boldly disrupt the industry and bring the very best in wine and luxury experiences to consumers around the world."
