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Treasury Wine Estates (ASX:TWE) - CEO, Michael Clarke
CEO, Michael Clarke
Sourced: Business Insider
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  • Australia’s biggest wine company, Treasury Wine Estates (TWE), is looking to break off from its Penfolds wine brand and becoming a separately listed company
  • Treasury says this move will separate its luxury and commercial portfolios in a demerger that could be completed by the end of 2021
  • Treasury Wines says the move would create a new ASX top 50-100 company for its Penfolds luxury wine brand and an ASX 100-150 company for the new TWE.
  • However, this move is subject to cost-benefit evaluation regarding shareholders, along with regulatory approvals
  • CEO Michael Clarke says Penfolds accounts for approximately 10 per cent of Treasury’s transaction volume, but well over half of the company’s earnings
  • Treasury Wine Estates is up 2.75 per cent on the market today, selling shares for $10.85 each

Australia’s biggest wine company Treasury Wine Estates (TWE) is looking to break off from its Penfolds wine brand and becoming a separately listed company.

Treasury says this move will separate its luxury and commercial portfolios in a demerger that could be completed by the end of 2021.

Treasury Wines says the move would create a new ASX top 50-100 company for its Penfolds luxury wine brand and an ASX 100-150 company for the new TWE.

This announcement followed an assessment of Treasury’s business strategy and structure.

However, this move is subject to cost-benefit evaluation regarding shareholders, along with regulatory approvals.

CEO Michael Clarke says Penfolds accounts for approximately 10 per cent of Treasury’s transaction volume, but well over half of the company’s earnings.

“A potential demerger would enhance the new TWE’s and Penfolds’ ability to pursue their own strategic priorities and deliver a stronger long-term growth profile under separate teams and ownership structures,” Michael said.

Chairman Paul Rayner said he was excited about the prospects that a demerger could create for both businesses.

“The new TWE would remain the largest globally integrated wine platform in the world, with a diversified sourcing footprint, diversified end markets and significant opportunity ahead of it to continue the growth of its iconic brand portfolio across all markets,” Paul said.

“Penfolds is an icon of Australian luxury, with impressive margins and significant growth runway in Asia and globally,” he added.

Shareholders will receive shares in Penfolds and the New TWE.

Treasury Wine Estates is up 2.75 per cent on the market today, selling shares for $10.85 each at 1:07 pm AEST.

TWE by the numbers
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