Diageo share price: Group sells wine interests in Argentina
- Diageo plc has agreed the sale of its wine interests in Argentina.
- The sale includes the Navarro Correas and San Telmo wine brands.
- Diageo plc shares were changing hands at about 0.37% up intraday.
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Diageo (LON:DGE), the world’s largest spirits maker, has agreed the sale of its wine interests in Argentina to local group Grupo Peñaflor for an amount described as “not material”.
The sale includes the Navarro Correas and San Telmo wine brands, together with production sites and vineyards. The transaction, to be completed early next year, is expected to be earnings per share (EPS) neutral in the first full year on closing and would result in an exceptional pre-tax loss of around £60 million.
Diageo further revealed that it had come to a distribution agreement with Peñaflor. Under the deal, the Argentinean company will distribute Diageo’s international brands in the Latin American country and “after an interim period” will also play a role in the production of the distiller’s brands. “The appointment of a dedicated distributor in Argentina will strengthen Diageo’s route to market and is expected to accelerate the performance of Diageo’s brands there,” the blue-chip company said.
Last month, Diageo agreed to sell two of its wine businesses for $552 million to US-based Treasury Wine Estates. Having also recently divested its 57.9 percent stake in Jamaican Red Stripe brewer Desnoes & Geddes and Guinness Anchor Berhad to Heineken for around £515 million, Diageo will have released £1 billion through selling non-core assets since the start of the financial year. CEO Ivan Menezes last month said the new strategy was to drive “stronger, sustained performance” through focus on a smaller core portfolio.
Recovering from subdued morning trading, as of 15:24 GMT, Diageo’s shares were changing hands at 1,901.00p, 0.37 percent up intraday. The stock was outperforming the FTSE 100 index, which meanwhile stood 0.47 percent lower at 6,382.02 points.
As of 15:34 GMT, Thursday, 05 November, Diageo plc share price is 1,902.25p.
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