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Biggest drinks trade acquisitions of 2018

With another year behind us we look back at the biggest deals that were finalised in 2018, which saw Tequila continue to dominate and two of Spain’s most historic sparkling wine producers sell off large stakes in their business.

Bacardi made headlines with its astronomical $5.1 billion acquisition of Patron, showing the continuing strength of Tequila, which proved to be the tipple of choice for one ‘big’ named celebrity. While Ryan Reynolds made his first steps into the gin market.

2018 brought with its a worrying start for the now defunct Conviviality, which following its acquisition of Matthew Clark and Bibendum in the prior years, hit the rocks after failing to account for a £30 million tax bill.

Thrown into chaos, it was left to AB InBev and cider maker C&C to swoop in and save the stricken distributors from Conviviality.

Elsewhere, the cannabis market has continued to grow. Constellation, who bought a $114m stake in Canopy Growth in 2017, upped their investment by $4 billion in August, taking a 38% stake in the company.

Click through for a reminder of some of the biggest deals that were finalised in 2018…

De Bortoli acquires Rutherglen Estates

In December, Australian producer De Bortoli acquired Rutherglen Estates in Victoria, in a deal that includes the vineyards, winery and tourist facilities.

Although the de Bortoli family and its main winery is based in Riverina in New South Wales, it has been on a buying spree in Victoria of late, picking up properties in Yarra Valley, King Valley and Heathcote.

“The Rutherglen vineyard purchase complements the family’s existing premium Victorian vineyard holdings in the Yarra Valley, King Valley and Heathcote wine regions,” said Darren De Bortoli in a statement.

“Rutherglen Estates also provides De Bortoli Wines with a third winemaking facility in addition to the business’ Riverina and Yarra Valley sites. The proximity to its Riverina operations is also an advantage.

“Based on growing customer interest and strong sales forecasts, the De Bortoli family is confident that premium quality Victorian red wine with density, freshness and interest will increasingly be in high demand both domestically and internationally.”

As well as a range of red, white and sparkling wines, Rutherglen Estates also has a range of sweet Muscats which is something of a speciality of De Bortoli.

The purchase brings 185 hectares into De Bortoli’s portfolio and its total vineyard holdings to 820ha, 700ha producing fruit.

Ryan Reynolds buys US-based Aviation Gin

February saw one of the biggest drinks trade acquisitions by a celebrity, as Ryan Reynolds snapped by US-based Aviation gin.

Declaring Aviation “best damn gin on the planet”, the actor confirmed he had bought a “significant” stake in the brand from Davos Brands for an undisclosed some, becoming its new owner and creative director.

As part of his investment, Reynolds will also take a seat on its board, become a creative director for the brand and “play an active role in the day-to-day business” as part of his “mission to introduce the world to the great taste of Aviation”.

Reynolds added: “Aviation is the best tasting gin in the world. Once I tried it, I knew I wanted to get involved with the company in a big way. If you think all gin tastes the same, you’d be mistaken. Aviation is in a completely different league and I couldn’t be prouder to be a part of the company.”

HIs investment follows other high profile celebrities to have entered the spirits arena, including Diddy and more recently George Clooney, who in 2017 sold his Casamigos Tequila brand to Diageo for US$1billion.

Edrington sells Cutty Sark Scotch whisky brand to La Martiniquaise

Scottish drinks company Edrington sold its Cutty Sark blended Scotch whisky brand to French spirits group La Martiniquaise for an undisclosed sum.

Edrington, which owns Scotch brands including The Macallan, Highland Park, The Glenrothes and The Famous Grouse, first announced that it was putting its Cutty Sark and Glenturret brands for sale, alongside the Glenturret distillery in Crieff (Scotland’s oldest single malt distillery) in order to prioritise investment in its core brands, in June 2018.

Edrington chief executive Ian Curle said at the time that the proposals will enable “greater focus and investment to support the long-term growth of the company’s premium portfolio.

The Cutty Sark brand was first launched in 1923 by Berry Brothers and Rudd, and was sold to Edrington in 2010. The spirit is blended and bottled at Edrington’s Great Western Road site and accounts for roughly 10% of volume output from the facility.

Edrington will continue to provide blending and bottling and other services during the transition period.

In December, it was announced that The Glenturret malt whisky distillery in Crieff  had been sold to French wine company, Art & Terroir, whose business is mainly focused on the production and distribution of high-end wines. With this acquisition, the company will enter the Scotch whisky and spirits business.

Sex and the City’s Mr Big buys Ambhar Tequila

Following in George Clooney’s footsteps, Sex and the City star Chris Noth acquired a majority stake in Ambhar Tequila for an undisclosed sum in September. Following an interview with the drinks business in December, the star joked that his Tequila was “better than Clooney’s”. 

Ambhar Tequila is made in small batches from 100% Weber Blue agave. All harvesting and preparation is done by hand and the agave hearts are steamed, roasted, mashed and fermented in accordance with ancient recipes.

The range includes an oak rested Reposado and an oak aged Añejo which is said to boast “smoky aromas and soft, silky palate”.

The bottle is inspired by the ‘canteen’ bottles cowboys used to carry alcohol in, and features a dragonfly luck charm tied to a leather chord.

The American actor, known for his roles on Law & Order and The Good Wife, will take on the role of creative director for Ambhar and will work with its founders on how to grow the brand in the US and export markets.”

Noth helped secure a national distribution deal with the Republic National Distributing Company in the US, to take the Tequila across America. At the moment, the Ambhar range is available at select stores in Florida, Texas, California, Oklahoma and Mississippi, and is also on sale in Mexico. It will soon be available in New York, Colorado, Illinois, and Ohio.

EPI buys big stake in Tardieu-Laurent

EPI Group, the owner of Piper-Heidsieck, acquired a 49% stake in Rhône ‘micro-négociant’ Domaine Tardieu-Laurent in October.

Although the amount paid by the amount paid in the transaction was not disclosed, both parties said the deal was mutually beneficial.

For EPI, which owns Piper and Charles Heidsieck Champagne, Biondi-Santi in Brunello di Montalcino and Château la Verriere in Luberon, it gains the winemaking skills of father and son team Michel and Bastien Tardieu and the wines from this exciting Rhône producer which is increasingly gaining a dedicated following among fine wine enthusiasts.

In return, Tardieu-Laurent will see an improved cashflow (it releases each vintage only after two years) and will therefore also help the producers they work with.

Furthermore, the domaine will be able to make use of EPI’s distribution network in Paris and some other markets where it is not yet present.

The Tardieu family will remain in overall control and nothing will change in those markets in which they are already present.

Henkell completes acquisition of Spain’s Freixenet

In August, Henkell, the Oetker Group’s wine and spirits branch, completed its acquisition of 50% of Cava producer Freixenet S.A.’s shares from the Hevia and Bonet families, following the approval of the European Commission.

Freixenet’s honorary president, José Ferrer Sala, and chairman, José Luis Bonet, will still own the remaining half of the drinks brand’s shares, giving Freixenet’s Spanish executives and the German drinks manufacturer equal ownership of the business.

The acquisition, which makes Henkell the majority shareholder by 0.67%, will mean that the German and Spanish drinks giants will be able to “access new markets and distribution channels, enabling them to achieve sustainable growth,” according to an emailed statement.

The new board of directors of Freixenet will be led by the two co-presidents José Luis Bonet and Dr. Albert Christmann, general partner of Dr. August Oetker KG.

Further members will include Demetrio Carceller Arce, president of S.A. Damm, as well as Pedro Ferrer and Dr. Andreas Brokemper, spokesman of Henkell’s management, who both will become managing directors.

Henkell – which produces sparkling and still wines alongside beer and spirits – has a portfolio includes well international drinks brands such as Henkell and Mionetto.

Codorníu sells €390m majority stake to Carlyle Group

Bruno Colomer Marti, chief winemaker at Codorníu

Another major acquisition in the Spanish sparkling wine market, Codorníu Raventós Group announced in June that it had entered exclusive negotiations with the Carlyle Group, fresh from its acquisition of Accolade Wines for AU$1 billion, to sell a majority stake of its business.

Codorníu Raventós is the oldest family-owned Cava-producer in Spain, with 10 wineries across Spain, Argentina and California and over 3,000 hectares of vineyards.

“This agreement will help boost the company overseas and consolidate and give continuity to our strategy, centred on building valuable and prestigious brands,” said Mar Raventós, chairwoman of Codorníu.

“After analyzing our various options, we have reached a consensus, agreeing on a solution which has a lot of potential and takes a long-term view on leadership for the company.”

This deal was expected to close at the end of the year.

C&C Group and AB InBev save Matthew Clark and Bibendum from the flailing Conviviality PLC

British and Irish drinks producer and distributor C&C Group and brewing giant AB InBev ended months of turbulence for employees and customers of Conviviality in April, having announced a joint plan to acquire Matthew Clark, Bibendum and other subsidiaries from the ailing Conviviality.

It followed a torrid start to the year for Conviviality, which issued its first profit warning on 8 March in which it declared that a “material error” in its financial forecasts had meant that its profit would be £5.2 million less than expected.

This was followed by an update on 14 March in which it added that it was facing a £30 million tax bill and had suspended trading in its shares. CEO Diana Hunter stepped down from the board on 19 March, her departure reportedly a pre-requisite for investors to support an equity fundraising attempt.

On 21 March, it announced it would be attempting to raise £125m to pay off debts and continue trading, but on 28 March, Conviviality reported that it had failed to reach this equity target. 

It suggested parts of the business would have to be sold off, and on 29 March, filed notice of its intention to appoint administrators within 10 business days “unless circumstances change”.

In May, it was announced that Michael Saunders would be returning to Bibendum as chief executive officer.

Constellation seals $4bn deal with Canopy Growth

Canopy Growth CEO Bruce Linton

One of the biggest trends of the year was cannabis, with a number of drinks companies making in roads into this burgeoning sector, but none more so than Constellation Brands.

In 2017, the company announced a $114m investment in Canada’s Canopy Growth with plans to make cannabis-infused drinks.

Canopy Growth is a world-leading cannabis and hemp company offering distinct brands and curated cannabis varieties in dried, oil and capsule forms. The firm has operations in 12 countries across five continents.

Then, in 2018, Constellation came back with a further investment to dwarf its first, ploughing $4 billion into the company.

“The global cannabis market presents a significant growth opportunity and Canopy Growth is well-positioned to establish a strong leadership position in this fast-evolving category,” Rob Sands, chief executive of Constellation said at the time.

“With this investment, Constellation Brands increases its ownership interest in Canopy Growth to approximately 37% of outstanding common shares of Canopy Growth and has appointed two members of its executive team, as well as two independent directors, to the board of directors of Canopy Growth.”

Sands is due to step down as CEO on 1 March but will stay on at Constellation Brands in the role of executive chair.

Bacardi buys Patron Tequila for $5.1 billion

While there was plenty of big acquisitions in 2018, none were as big as Bacardi’s acquisition of Patron Tequila, which snapped up the ultra-premium brand for $5.1 billion in January, eclipsing the Diageo / Casamigos deal by $4.1bn.

In 2017, George Clooney and Rande Gerber’s Tequila brand Casamigos made history when Diageo bought the fledgling company for US$1 billion.

The deal made Bacardi the number one spirits player in the super-premium segment in the US and the second largest spirits company in market share by value in America.

Best known for its rum, Bacardi has held a roughly 25% stake in Patrón Spirits International AG for nearly a decade, and also owns Grey Goose, Bombay Sapphire and Martini.

Patrón was founded in 1989 by Californian entrepreneur John Paul DeJoria, co-founder of Paul Mitchell hair products.

The brand launched at the audacious price of $37 a bottle when the ultra-premium Tequila category didn’t exist. It is now the industry’s leader, with US sales of $1.6 billion in 2016, according to Euromonitor.

Patrón produces over 36 million bottles of Tequila a year, while Casamigos was expected to produce 170,000 cases last year.

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