The deal relates to Diageo's US-based Chateau and Estate Wines and the UK-based Percy Fox businesses for US$552 million.
The net proceeds of approximately £320m, after tax and transaction costs will be used to repay borrowings. The transaction, which is subject to regulatory approval, is expected to complete around the end of the calendar year.
Diageo chief executive Ivan Menezes said:“Diageo’s strategy is to drive stronger, sustained performance through focus on our core portfolio and today’s announcement is another element of that strategy in action. Wine is no longer core to Diageo and this sale gives us greater focus.
“With the completion of this transaction Diageo will have released £1 billion from the sale of non-core assets since the start of the financial year.This proactive portfolio approach has focused the business, enhanced our financial strength, improved our returns and strengthened the business, positioning us even more firmly to deliver our performance ambition,” said Menezes.
Following completion of this transaction Diageo’s wine interests are 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.