Vina Concha y Toro Agrees to Acquire Fetzer Vineyards from Brown-Forman, Expanding its Operations to California
SANTIAGO, Chile, March 2, 2011 /PRNewswire-AsiaNet/ —
Vina Concha y Toro S.A. (NYSE: VCO) and Brown-Forman Corporation (NYSE: BFA, BFB) announced today the acquisition by Vina Concha y Toro of Fetzer Vineyards and related assets from Brown-Forman in California. The purchase price for the transaction is US$238 million. The transaction is expected to close in April 2011.
The acquisition includes a portfolio of brands with attractive positioning in the American wine market: Fetzer, Bonterra, Five Rivers, Jekel, Sanctuary and Little Black Dress. For fiscal 2010, the acquired brands represented volumes of 3.1 million cases and net sales of US$156 million; Concha y Toro will also acquire assets including vineyards, cellars and a bottling plant.
Fetzer is one of the top ten brands by volume in the U.S. market with sales of 2.2 million cases annually. Fetzer is also a pioneer in the development of sustainable practices and recognized as an environmental leader, a commitment that has been a hallmark of the brand for the last 20 years. Bonterra is the undisputed leader in the premium organic category and pioneered the development of vineyards in this category since 1987, with sales of 300 thousand cases annually.
Eduardo Guilisasti, Chief Executive Officer of Vina Concha y Toro said: “The Fetzer acquisition is the largest transaction of this type in the company’s history. It represents a continuation of our business strategy, which has been carried out successfully over time and enabled us to enjoy steady growth. We believe that this transaction opens additional growth opportunities globally, as well as in the American market, with its main brands Fetzer and Bonterra. We further intend to incorporate the culture of excellence and commitment of the great team at Fetzer who have created exceptionally strong consumer brands”.
Paul Varga, Chief Executive Officer of Brown-Forman said, “Fetzer and Bonterra have been wonderful brands for Brown-Forman over the years, but as our company has grown globally and our portfolio strategy has evolved, we believe refocusing our resources on what we deem to be our best opportunities for strong growth will provide superior shareholder returns over the long term. And we are particularly pleased that such a prestigious wine company as Vina Concha y Toro will continue the legacy of success these brands have enjoyed over the last several decades.”
Deutsche Bank acted as financial advisor in this transaction and Baker & McKenzie provided legal counsel to Concha y Toro.
SOURCE: Vina Concha y Toro S.A.
or Blanca Bustamante