Diageo exploring business sale for wine division

Wed, 06 May 2015 | BUSINESS SALE

Diageo is reportedly exploring a business sale of its wine division, which would include Sterling Vineyards and Blossom Hill.

The company, which is also behind big names such as Smirnoff and Guinness, has reportedly been witnessing growing levels of investor concern about its performance.

Sky News reported that a number of unidentified third parties have approached Diageo regarding the possibility of an acquisition.

A statement issued to the news agency read: “Diageo has a great wine business with great brands that are growing.

“We are sure there are many people who would love to own our wine business and we have received expressions of interest over the years. As you would expect we have a duty to consider any such interest carefully.”

The firm's wine brands only make up four per cent of the group's sales and are generally seen as a non-core section of its business.

The business was hit by a surprise fall in sales in the third quarter of 2014, which CEO Ivan Menezes attributed to “tough conditions in the emerging markets and subdued consumer demand in some developed markets”.

Sources have indicated that while a sale of the wine business might be useful for Diageo at this point if financial and other criteria aren't met the company will not feel compelled to go ahead with the sale of the business.

Read more about Diageo's earlier plans to dispose of its whisky businesses or view the latest businesses for sale.

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