It's not just wines. DEO is making moves in the beer space with this new deal just announced today. I would like to see the company use the proceeds of these sales to issue a special one-time dividend and restore some investor confidence.
@Diageo PLC, the world’s largest spirits company, said it had sold its stakes in Jamaican brewer Desnoes & Geddes Ltd and GAPL Pte Ltd, the majority owner of Malaysia’s Guinness Anchor Berhad, to Heineken NV for $780.5-million (510 million pounds). The transaction also includes Diageo’s acquisition of a 20 per cent stake in Guinness Ghana Breweries Ltd from the Dutch brewer, raising Diageo’s total stake in GGBL to 72.42 per cent. The maker of Smirnoff vodka, Guinness beer and Johnnie Walker whisky said the deal with Heineken would increase the companies’ focus in beer businesses in Jamaica, Malaysia, Singapore and Ghana. Diageo sold its 57.87 per cent stake in D&G, the maker of Red Stripe beer, and its 49.99 per cent stake in GAPL to Heineken, the companies said on Wednesday. Diageo said the deals would result in an exceptional profit after tax of about 440 million pounds.
Interesting. If DEO does sell their wine assets, what will they do with the proceeds? I think a special dividend would be nice for the shareholders who have stuck it out with the firm through the last couple of difficult years.
Their wine brands represent about 4% of their net sales. However, their upper tier wineries are holding lots of vintage inventory and the value of the Napa real estate is huge.
great new's,talked about for awhile now...Blossom hill,Chalone,Sterling few other's....crown jewel they distribute Dom & Moet....Undervalued...imo....cheap shares with div....imo...
BUD is brewing up a takeover of SAB.L. Yesterday news that BF-B is looking to offload its Southern Comfort liquor brands. Now today news that DEO wants to divest its wine brands.
@LONDON (Alliance News) - Drinks giant Diageo PLC is holding detailed talks about the sale of its wine brands, Sky News reported. The company is understood to have accelerated plans in recent weeks to offload its wine brands, including Blossom Hill, and the suitor thought to be involved in the talks is Australia'sTreasury Wine Estates.Sources told Sky a deal for the wine business could be done during October, though they cautioned no agreement has yet been signed and the deal could still fall through.
DEO and SAB.L should just merge and get it over with.
@Diageo and SABMiller could boost their profits by nearly a fifth and see off a much-feared AB InBev takeover if they choose to merge, analysts say. A merger between Diageo and SABMiller – two of the world’s largest alcohol companies – would also face few regulatory hurdles, financial services firm Nomura said. It claimed that a global economic slowdown and the threat of an AB InBev buyout, especially to SAB Miller, means that a 50/50 fusion between it and Diageo – to create “SABGEO” – is a sound strategy. “We would see this as a similar move to the creation of Diageo from the merger of Guinness and Grand Metropolitan in 1998,” Nomura said. “We estimate that with around 50/50 emerging and mature market split of profits, a merged group could offer a firmer profit base in uncertain times (for SABMiller holders) and potentially increase its growth profile in the longer term (for Diageo holders).” On the estimated financial benefit to the companies, it said, “With broadly similar market capitalisations, we see such a deal adding 18% to combined net profits, assuming £1 billion of cost synergies and some benefit on tax, with minimal regulatory issues to subtract value.”
So, DEO wants to get more exposure to beer in Africa via Guiness.
@Diageo Plc, the world’s biggest distiller, is considering raising its majority stake in brewer Guinness Nigeria Plc to 70 percent, a deal that could cost the company more than $200 million. Diageo, based in London, wants to get 20 percent of its sales from Africa after investing more than $1 billion in the continent over the last five years, Chief Executive Officer Ivan Menezes told Bloomberg in February. The company declined to comment further when contacted on Wednesday. Guinness Nigeria, the country’s second biggest brewer, said Sept. 7 that full-year profit fell 19 percent as weaker economic growth in the continent’s most populous country hurt sales of pricier beer brands. Nigeria is suffering from lower crude prices, with government revenues declining and public sector workers going unpaid for months.
Competitors are making moves. What is DEO's plan for beer?
@NEW YORK (AP) -- Heineken is taking a 50 percent stake in California brewer Lagunitas, giving the Dutch brewer access to the growing craft beer market. Lagunitas Craft Brewing Co. is the fifth-largest craft brewer in the U.S. by volume. Its beers include Lagunitas IPA, Hop Stoopid and Maximus. It operates breweries in its home town of Petaluma, California, and in Chicago. It is building a third in Azusa, California. Aside from the U.S., Lagunitas is sold in Canada, Sweden and Japan. The deal with Heineken will allow it to expand to more global markets.
I think "the inquiries" may have diminished enthusiasm for unbridled bashing, but that is only a guess.
GLTA. Hoping this investment will see better days ahead. If not, I bought it and I own it.
God Bless America