In a landmark deal potentially valued at US$1 billion, Australian wine giant Treasury Wine Estates (TWE) has announced its acquisition of California’s DAOU Vineyards, aiming to significantly enhance its luxury wine portfolio.
The acquisition comes as DAOU, based in the winemaking region of Paso Robles, California, has been recognized as the “fastest-growing luxury wine brand in the U.S.” over the past year by a Circana Market Advantage report.
The deal, which includes an upfront payment of US$900 million and an earn-out of up to US$100 million, is contingent on DAOU Vineyards meeting specific post-acquisition performance milestones.
Tim Ford, CEO of Treasury Wine Estates, expressed his enthusiasm about the acquisition, stating, “The U.S. is the world’s largest wine market, and adding DAOU to our portfolio accelerates the growth of our luxury portfolio globally. This is a transformative move that underscores our commitment to leading the luxury wine segment.”
“The U.S. is the world’s largest wine market and we’re beyond thrilled to add DAOU to our portfolio, cementing our position as a global luxury wine leader. This is a transformative acquisition that accelerates the growth of our luxury portfolio globally and paves the way for new luxury consumer experiences.”
“DAOU is an award-winning luxury wine business with an outstanding track record for growth and we have grand plans for DAOU to become the next brand with the international scale and luxury credentials of Penfolds. With DAOU, we will be well positioned to connect with a new generation of wine lovers, combining tradition with innovation, culture-led experiences, and global distribution.”
Founded in 2007 by brothers Georges and Daniel Daou, DAOU Vineyards is celebrated for its ‘ultra-luxury’ Cabernet Sauvignon-based PATRIMONY wines and its unparalleled luxury experiences. Daniel Daou, co-founder and Chief Winemaker, remarked on the synergy of the partnership, saying, “In Treasury Wine Estates, we have found a partner that not only understands the value of our brand and the premium assets we have cultivated but also the importance of ensuring that we maintain a relentless focus on quality and craftsmanship as we step into our future. Both companies are change leaders and by joining forces, we will continue to boldly disrupt the industry and bring the very best in wine and luxury experiences to consumers around the world.”
TWE’s acquisition is poised to tap into the U.S. luxury wine market, the world’s largest, valued at US$4 billion, especially enhancing its offerings in the US$20-$40 range.
The deal encompasses a range of assets, including the DAOU brand, the DAOU Mountain Estate, a hospitality site, four boutique luxury wineries, and approximately 400 acres of vineyards in the sought-after Adelaida District of Paso Robles. The Daou brothers will continue to play pivotal roles, with Georges as Founder and Daniel as Founder and Chief Winemaker.
With a vision of global expansion, TWE plans to leverage DAOU’s strong consumer experience and its own global marketing expertise to reach new international markets for luxury wine.
The deal is anticipated to conclude by the end of 2023, pending U.S. anti-trust approval.