Diageo share price: Drinks giant in talks to sell wine business
Diageo (LON:DGE) is holding detailed talks about the sale of its wine unit, Sky News has reported, citing inside sources.
Responding to City pressure to improve its performance, the blue-chip drinks giant is understood to have accelerated plans in recent weeks to offload a portfolio, which includes the Blossom Hill and Piat d’Or brands. Although no agreement has yet been signed, a deal is expected next month, with Australian wine producer Treasury Wine Estates in the frame to acquire the business.
The news comes amid growing pressure from some investors on CEO Ivan Menezes amid a slowdown in emerging markets and currency weakness. Diageo said in a trading update last week that the group’s performance was in line with expectations, although operating profit for the full year may decline if currency headwinds persisted.
The Johnnie Walker whisky and Smirnoff vodka maker has periodically considered disposing of its wines bands, which account for less than five percent of its global revenue. “Wine is a small part of our business but it plays an important role. We have no other comment to make,” a Diageo spokesman told Sky News today.
Diageo’s share price has advanced today. As of 12:39 BST, the stock was changing hands at 1,767.50p – 2.85 percent up intraday. Meanwhile, the FTSE 100 benchmark index was 2.33 percent higher at 6,047.14 points.
As of 13:47 BST, Wednesday, 30 September, Diageo plc share price is 1,768.25p.
Trade this stock with Degiro for only £1.75 + 0.004%. On average 84% lower fees than other brokers!