Diageo continues to shed wine assets while refocusing on other aspects of its business.
The global corporation has agreed to the sale of its Argentian wine interests to Grupo Peñaflor.
This includes the Navarro Correas and San Telmo wine brands, together with production sites and vineyards. In the year ending June 30, 2015, net sales of these assets were $27.8 millon.
In addition, Peñaflor will become the distributor of Diageo’s international spirits brands and, after an interim period, will jointly produce with Diageo its domestic spirits brands across Argentina.
“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 company said in a press release.
Grupo Peñaflor is the largest producer and distributor of wine in Argentina, the company says, and one of the top ten wine producers worldwide.
The transaction is expected to be completed early in 2016.
Sale proceeds have not been disclosed.
The transaction, which is eps neutral in the first full year following completion, will result in an exceptional loss before taxation of approximately $90.2 million upon completion, the company says.