Australian wine company Treasury Wine Estates plans to acquire the majority of the U.S. and European wine operations owned by liquor giant Diageo.
The $600 million transaction — which includes a $552 million price tag and the assumption of $48 million in capitalized leases — will transfer the U.S. brands Beaulieu Vineyards, Sterling Vineyards, Acacia, Provenance and Hewitt and U.K. brand Blossom Hill.
"The additional supply of luxury and masstige wine will be a game-changer for our U.S. brands, providing us with an immediate opportunity to step-change our growth in the U.S., Canada, Asia and Latin America," said Treasury CEO Michael Clarke.
The company plans to finance the acquisition with a $306 million debt sale and $351 stock sale.
Diageo, which owns Smirnoff and Captain Morgan, along with Guinness beer, said that wine is no longer a core business and that the net proceeds will be used to pay back debt.