The agreement relates to the sale of the US-based Chateau and Estate Wines and the UK-based Percy Fox businesses for £360 million.
The transaction, subject to regulatory approval, is expected to complete around the end of the calendar year.
“Wine is no longer core to Diageo and this sale gives us greater focus,” commented Diageo’s Chief Executive Ivan Menezes, “Diageo’s strategy is to drive stronger, sustained performance through focus on our core portfolio and today’s announcement is another element of that strategy in action.”
The question is, does Diageo believe beer brands like Guinness to be part of its ‘core portfolio’ or will brands like Guinness soon also be put up for adoption?
With the completion of this transaction Diageo will have released £1 billion from the sale of non-core assets since the start of the financial year.
In June 2010 Diageo realised £170 million from a sale and leaseback arrangement for certain land and facilities which Diageo Chateau and Estate Wines operates.
Following completion of this transaction Diageo’s wine interests will be limited to Justerini & Brooks Wine Merchants, the Argentinian wine business of Navarro Correas and the wine brands of Mey Icki and USL as well as the Chalone brand and assets and the Acacia winery and vineyard.