Diageo to sell most of its wine business for $552m

Guinness-owner Diageo is selling the majority of its wine business to one of the world's biggest publicly-listed winemakers, Australia's Treasury Wine Estates (TWE) for $552m.

The transaction, which is subject to regulatory approval, is expected to complete around the end of the year.

Following completion of the sale, Diageo's wine interests will be limited to Justerini & Brooks Wine Merchants, the Argentinian wine business of Navarro Correas, the wine brands of Mey Icki and USL, the Chalone brand and assets and the Acacia winery and vineyard.

Chief executive of Diageo Ivan Menezes said: "Diageo's strategy is to drive stronger, sustained performance through focus on our core portfolio…Wine is no longer core to Diageo and this sale gives us greater focus.

"With the completion of this transaction Diageo will have released £1bn from the sale of non-core assets since the start of the financial year."

In June 2010 Diageo realised $260m from a sale and leaseback arrangement for certain land and facilities which Diageo Chateau and Estate Wines operates.

Diageo also owns the brands Johnnie Walker, Crown Royal, JεB, Buchanan's and Windsor whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio and Tanqueray.