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Report: Pernod Ricard Considers Bid For Treasury Wine Estates

March 8, 2021

A report out of the U.K. over the weekend asserts that Pernod Ricard is either considering—or has already lodged—an acquisition offer for Treasury Wine Estates. The Mail On Sunday reported that Pernod’s bid for Treasury, either in part or in full, could value the Australian winemaker at above £5 billion ($6.9b).

In the same piece, The Mail On Sunday reported that Treasury had already received a A$15.67-a-share ($12.04-a-share) offer, but that it was unclear whether it had come from Pernod or possibly a U.S. private equity firm. Following the report, Treasury’s share price closed up 6% to A$10.97 ($8.41) on Monday. A Treasury spokesperson told SND the company “does not comment on rumor or speculation.”

Treasury posted net sales down 5.9% to A$1.4 billion ($1.1b) for its fiscal first half ended in December, with EBITS slipping 22% to A$284 million ($220m). The company’s results were weighed down by pandemic restrictions cutting into occasions for higher-margin luxury wines and trade tensions between Australia and China, which has imposed high tariffs on Australian wines in recent months.

Last month, TWE announced that it’s realigning its business into three separate operating units—Penfolds, Treasury Premium Brands, and Treasury Americas—beginning in July. TWE had previously considered demerging the higher-margin Penfolds business entirely, but more recently put those plans on hold.

Pernod’s wine stable includes Mumm and Perriet-Jouet Champagnes, as well as Campo Viejo (Spain), Brancott (New Zealand), and Jacob’s Creek (Australia). While the Champagne brands and Jacob’s Creek saw sales slip in the six months through December, Campo Viejo and Brancott led the company’s “strategic wines” unit to 3% net sales growth. The company had U.S. wine volume of 1.7 million cases in 2020, according to Impact Databank.—Daniel Marsteller

Treasury Wine Estates’ Top Five Brands In The U.S.
(millions of 9-liter case depletions)
Rank Brand Origin 2019 2020 Percent
Change1
1 Beringer California 4.73 4.19 -11.3%
2 19 Crimes Australia 1.63 2.18 33.8%
3 Lindemans Australia 1.12 0.97 -13.3%
4 Sterling2 California 0.84 0.76 -10.0%
5 Matua New Zealand 0.62 0.73 18.5%
Total Top Five3 8.94 8.83 -1.1%
Other Brands 2.70 1.99 -26.5%
Total TWEA 11.64 10.82 -7.0%
1 Based on unrounded data
2 Includes Sterling Vintners Collection and Sterling Vineyards
3 Addition of columns may not agree due to rounding
Source: IMPACT DATABANK © 2021
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