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- Treasury Wine Estates (TWE) has entered a long-term licencing agreement with The Wine Group in relation to several of its U.S. commercial-tier brands
- The deal will see The Wine Group source and sell Beringer Main & Vine, Beringer Founders’ Estate, Coastal Estates and Meridian brands in the Americas
- The Wine Group will acquire the brands’ existing inventories and assume responsibility for future bulk wine supply contracts
- TWE is planning to deliver a premium-focused business in the Americas
- Treasury expects to generate a one-off net cash inflow of at least $300 million as part of the plans
- TWE shares are in the grey, trading at $11.10 each
Wine producer and seller Treasury Wine Estates (TWE) has entered a long-term licencing agreement with The Wine Group.
The agreement will see The Wine Group acquire the existing inventories of several of the company’s U.S. commercial brands on a progressive drawdown basis, including Beringer Main & Vine, Beringer Founders’ Estate, Coastal Estates and Meridian brands.
It will also assume responsibility for the brands’ future related bulk wine supply contracts.
Treasury Wine Estates Chief Executive Officer Tim Ford said the deal is a step forward for TWE, which is implementing plans to deliver a premium-focused business in the Americas with around half the volume and similar earnings over time.
“For TWE, this transaction is a significant milestone towards our plans to deliver the future state premium U.S. wine business and we can now focus solely on continuing the growth of our premium brand portfolio to drive future performance in the Americas,” he said.
The company expects to generate one-off net cash inflow of at least $300 million as part of its plans, including approximately $100 million off the back of its deal announcement.
The Wine Group CEO Cate Hardy agreed the long-term arrangement would be mutually beneficial for both companies.
“The Wine Group is a leader in the industry with strong wine brands that deliver unbeatable value,” Cate said.
“The acquisition of these popular brands further positions The Wine Group as a global leader in wine,” the Wine Group CEO added.
TWE shares in the grey on Wednesday, trading at $11.10 each at 10:28 am AEDT.
