Diageo's Sterling Vineyards likely to interest Treasury Wine Estates, other brands likely to be avoided
Treasury Wine Estates [ASX: TWE] may consider buying Diageo’s [LON: DGE] California wine brand, Sterling Vineyards, the Australian Financial Review reported on 3-4 October. According to the unsourced report TWE would avoid other lower end brands being sold by Diageo.
The report noted that there is rising anticipation that Diageo, which is primarily a vendor of spirits, is moving closer to selling its wine business, which accounts for only 4% of its total revenue.
The paper said that Diageo’s wine business includes number one UK selling Blossom Hill, a major commercial California wine brand, and Sterling Vineyards. The report noted that Sterling is considered a more likely target for TWE because of its position as a luxury wine.
TWE’s chief executive, Mike Clarke, has said in the past that the company would pursue luxury wine assets in the US, should the right opportunity arise.
The paper said that TWE spokesperson would not comment on the speculation.
Australian Financial Review