Diageo raises a glass as it sells off its wines in £360m deal
Popular tipples including Blossom Hill and Piat d'Or are being sold under a $552m deal (£360.5m) as drinks giant Diageo toasted the sale of its main wine businesses.
The Johnnie Walker-to-Guinness group is selling its UK wine arm Percy Fox and US-based Chateau and Estate Wines to Australian giant Treasury Wine Estates - the group behind brands such as Penfolds and Wolf Blass.
The deal sees Diageo largely pull out of the wine market to concentrate on its stable of key brands.
It's the latest big deal for the drinks industry after terms were agreed for AB InBev's £68bn takeover of SAB Miller.
Ivan Menezes, chief executive of Diageo, said: "Wine is no longer core to Diageo and this sale gives us greater focus."
Blossom Hill is the UK's second biggest wine brand and is part of the Percy Fox division within Diageo, which also includes Yellow Tail and Sterling Vineyards.
Treasury Wine also adds a number of major US wines, which it said would "transform" its presence in America.
Michael Clarke, chief executive of Treasury Wine, added the deal would be a "game-changer" for it in the US.
Diageo will make £300m net from the wine sale, which it will use to pay down company debts.
It means the group will have freed up £1bn from the sale of assets since the start of the year.
In 2014 it sold Irish whiskey Bushmills, distilled in the Co Antrim town, to Casa Cuervo in Mexico, in return for its Don Julio tequila.
The latest deal leaves Diageo with a minimal interest in wine, including Justerini & Brooks Wine Merchants, the Argentinian wine business of Navarro Correas, Mey Icki and USL wine brands and the Acacia winery and vineyard.
FTSE 100-listed Diageo, which operates in 180 countries, has pinned its growth on an expanding middle class in emerging markets in Latin America and Asia who could afford its premium brands such as Johnnie Walker, Captain Morgan and Tanqueray.
But in recent years the global slowdown has pegged back the firm's growth.
The strong pound and currency movements have given it an added headache in recent months and Diageo warned in September this would knock its profits by a bigger-than-expected £150m this year.
The company's brands also include Smirnoff, Baileys and Bell's.