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- Treasury Wine Estates (ASX:TWE) is set to acquire DAOU Vineyards, a renowned luxury wine brand based in California
- The acquisition reflects TWE’s strategy to shift towards a more upscale portfolio and expansion into the luxury wine market
- TWE will acquire 100 per cent of DAOU Vineyards with an upfront cost of $1.4 billion
- TWE entered a trading halt but last traded at $12.10
Treasury Wine Estates (ASX:TWE) is set to acquire DAOU Vineyards, a highly regarded luxury wine brand based in California.
This move is part of TWE’s broader strategy to elevate its portfolio and expand into the luxury wine market.
TWE will acquire 100 per cent of DAOU Vineyards, including its associated entities. The upfront cost of this acquisition is US$900 (A$1.4 billion), with the possibility of an additional US$100 million (A$157 million) earn-out if specific targets are met by 2025-2027.
DAOU is known for being one of the fastest-growing luxury wine brands in the US, with a strong presence in the trade.
TWE is doubling down on luxury wines, with a goal to make luxury-led portfolio premiumisation approximately 50 per cent of its global group net sales revenue (NSR).
The acquisition also fills a portfolio gap for TWE in the US$20-40 per bottle price range and strengthens its luxury offerings above US$40 per bottle.
It is expected to be earnings per share (EPS) accretive in the first full year of ownership.
The deal is expected to be completed by the end of the current year, subject to regulatory approval.
TWE is currently in a trading halt but last traded at $12.10.
