Brown-Forman Corp. agreed last week to sell Sonoma-Cutrer Vineyards to The Duckhorn Portfolio.
In exchange, Brown-Forman will receive approximately 21.5% ownership in Duckhorn (valued at approximately $350 million), as well as a cash consideration of $50 million.
The transaction, subject to customary closing adjustments and conditions, is expected to close in the fourth quarter of fiscal 2024.
“We are thrilled to welcome Sonoma-Cutrer Vineyards to the Duckhorn portfolio,” says Deirdre Mahlan, Duckhorn’s interim president, chief executive officer and board chair. “Sonoma-Cutrer is one of the fastest growing major brands in the luxury chardonnay category. We see an opportunity to further accelerate this growth and improve the operating margins of the combined company. This transaction expands our presence and visibility, diversifies our portfolio of luxury American winery brands and significantly increases our position in the luxury chardonnay category.
Under the terms of the agreement, the Sonoma-Cutrer brands, facilities and six vineyards across two appellations will join The Duckhorn Portfolio’s fine wine brands.
Upon closing, Brown-Forman will receive two seats on The Duckhorn Portfolio’s board of directors.
“The Duckhorn portfolio has a strong reputation for producing and marketing some of the finest wines in the world,” said Lawson Whiting, president and CEO of Brown-Forman Corporation. “Their understanding of the wine consumer, combined with a strong and diverse route to market, gives Brown-Forman great confidence that Sonoma-Cutrer will continue to grow and prosper as part of the broader portfolio of Duckhorn.
Whiting adds, “The addition of Sonoma-Cutrer to Duckhorn’s portfolio will enhance one of the most respected wine portfolios in the industry. Additionally, we believe that an equity investment in The Duckhorn Portfolio will be a valuable investment for Brown-Forman, allowing us to maintain a presence in the wine category while focusing our resources on developing our premium spirits brands. range and super high-end.
Sonoma-Cutrer Vineyards was founded in 1973 and released its first wine in 1981. The brand owns six vineyards spanning 1,121 acres in the Russian River Valley and Sonoma Coast appellations. Brown-Forman purchased the vineyards and brands in 1999. Sonoma-Cutrer is now the third-largest luxury chardonnay brand in the United States by retail sales, and the fastest-growing major brand in this category, according to Circana, formerly IRI.
Brown-Forman’s financial advisor is Greenhill & Co., LLC and its legal advisors are Gibson, Dunn & Crutcher LLP and Coblentz Patch Duffy & Bass LLP.