Diageo (LON:DGE) has agreed the sale of its major wine interests in an agreement with Treasury Wine Estates relating to the US based Chateau and Estate Wines and the UK based Percy Fox businesses for a consideration of $552 million. The net proceeds of approximately £320 million, after tax and transaction costs will be used to repay borrowings. The transaction, which is subject to regulatory approval, is expected to complete around the end of the calendar year.
Ivan Menezes, Chief Executive of Diageo, said:
“Diageo’s strategy is to drive stronger, sustained performance through focus on our core portfolio and today’s announcement is another element of that strategy in action. Wine is no longer core to Diageo and this sale gives us greater focus.
“With the completion of this transaction Diageo will have released £1 billion from the sale of non-core assets since the start of the financial year. This proactive portfolio approach has focused the business, enhanced our financial strength, improved our returns and strengthened the business, positioning us even more firmly to deliver our performance ambition.”
As of 07:25 BST, Wednesday, 14 October, Diageo plc share price is 1,843.00p.