Bottles of Penfolds Grange, made by Australian wine maker Penfolds and owned by Australia's Treasury Wine Estates, sit on a shelf for sale at a wine shop in central Sydney, Australia, August 4, 2014.
The wine producer has been resetting its strategy in an attempt to diversify outside of China, which used to contribute a third of its profits, after Beijing imposed tariffs on Australian wine in 2021 when Canberra called for an inquiry into the origins of COVID-19.
The winemaker's combined premium and luxury portfolios delivered double-digit gross profit growth in fiscal 2023, according to its annual report.
Including cost synergies of more than $20 million, the acquisition is expected to be mid to high-single-digit earnings per share (EPS) accretive in fiscal 2025, the first year of Treasury owning DAOU.
Treasury said it would also issue A$157 million of new shares to the existing owners of DAOU.
Persons:
David Gray, Penfolds Grange, Frank Family, Phillip Kimber, Roushni Nair, Shailesh Kuber, Krishna Chandra Eluri, Jamie Freed
Organizations:
Australia's Treasury Wine Estates, REUTERS, China Deal, Wine Estates, Treasury, P Capital, Thomson
Locations:
Australian, Sydney, Australia, China, Beijing, Canberra, Americas, Bengaluru