LONDON (dpa-AFX) - Treasury Wine Estates Limited (TWE.AX) agreed to buy the majority of the assets of Diageo Plc's (DGE.L, DEO) U.S. and U.K. wine operations for a cash consideration of US$552 million and assumption of US$48 million of capitalised leases.
The deal gives Treasury Wine U.S. brands including Beaulieu Vineyards and Sterling Vineyards, as well as Blossom Hill in the U.K. The purchase will double the Australian winemaker's U.S. revenue from luxury and premium wine.
The transaction is expected to deliver Treasury Wine Estates low double digit percent earnings per share accretion in the first full fiscal year following the (fiscal year 2017) including phased synergies.
The Melbourne-based company plans to fund the acquisition via a fully underwritten 2 for 15 pro-rate accelerated renounceable entitlement offer to raise about A$486 million, with the balance funded through new USD denomination fully underwritten debt facilities.
Treasury Wine shareholders will be offered two new shares for every 15 they own at A$5.60 per share to raise about A$486 million.
The acquisition is subject to certain regulatory approvals, including anti-trust approval in the US, and is expected to compete in about three months.
Treasury Wine expects EBITS for fiscal year 2016 to be between A$270 million and A$290 million, prior to the impact of the acquisition.
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