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TWE’s $1.6 billion acquisition

By Tuesday 31 October 2023November 1st, 2023No Comments

Treasury Wine Estates is buying leading luxury US wine business Daou Vineyards in a deal worth up to $1.6 billion ($US1 billion).

The upfront cost is $US900 million “plus an additional earn-out of up to US$100 million” if revenue targets are met for four years.

TWE CEO Tim Ford says the acquisition will “transform the business” and cement its position as a global luxury wine leader.

“The US is the world’s largest luxury wine market – valued at $US4 billion – and we’re beyond thrilled to add Daou to our portfolio,” he says.

“This is a transformative acquisition that accelerates 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.”

Ford says the acquisition fills a key portfolio opportunity for Treasury Americas in the $US20-$40 range and strengthens its luxury portfolio in the $US40+ range.

“The acquisition will strengthen Treasury America’s position as a leading and iconic US luxury wine business, increasing its presence with both wholesale and retail channel accounts and leveraging the strength of its luxury footprint to drive expansion across the US with plans to launch a Napa-sourced brand tier,” he says.

“TWE plans to take Daou to the world, bringing its global marketing and distribution expertise to their exceptional portfolio with the vision of becoming the next globally scaled luxury wine brand.

“Combined with Daou’s strong consumer experience, TWE plans to reach new international markets for luxury wine as well as exploring opportunities outside the US as part of its ongoing global sourcing strategy.”

Founded in 2007 by brothers and co-proprietors Georges and Daniel Daou and based in Paso Robles, California, Daou is the fastest growing luxury wine brand in the US trade over the past year.

It is recognised for its award-winning ‘ultra-luxury’ Cabernet Sauvignon-based Patrimony wines and benchmark-setting luxury experiences.

Daou Vineyards has a relentless focus on the next generation of luxury wine consumers from events and partnerships to an iconic brand home and tasting room on Daou Mountain with 90,000 visitors annually.

It also has an integrated digital platform to elevate the consumer experience.

The acquisition, which is expected to be completed by the end of this year subject to US anti-trust approval., includes the Daou brand, Daou Mountain Estate and hospitality site, four boutique luxury wineries and around 400 acres of vineyards in the coveted Adelaida District of Paso Robles.

Georges and Daniel Daou will remain engaged and highly involved in the business: Georges as founder, with Daniel as founder and chief winemaker.

Daou founders Georges and Daniel Daou said: “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.

“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.”

Ford says the deal allows TWE to reimagine its business through the lens of consumers and explore new innovations, categories and experiences.

“This acquisition provides the scale to support a future standalone Treasury Americas Luxury division that will be home to brands including Daou, Frank Family Vineyards, Stags Leap, Beringer, Etude and Beaulieu Vineyards,” he says.

“The Daou brand speaks directly to luxury consumers – it performs strongly with young wine enthusiasts and its Patrimony product sits among the world’s leading ultra-luxury brands – giving TWE the perfect platform to expand our consumer insights and build our luxury wine experiences.”

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