Ste Michelle possible sale?
September 10, 2008
By Richard Woodard
Stag's Leap Wine Cellars co-owner Ste Michelle Wine Estates could soon be up for sale after its parent company was bought in a multi-billion dollar tobacco deal.
Marlboro cigarette maker Altria has agreed to acquire smokeless tobacco company UST for US$10.4bn. The deal includes UST's Ste Michelle wine division, which owns Columbia Crest and Domaine Ste Michelle.
Last year, Ste Michelle joined forces with Antinori to acquire legendary Napa producer Stag's Leap Wine Cellars from the Winiarski family for a reported US$185m.
Altria is yet to decide what to do with Ste Michelle. 'It's a great business – we would like to understand it better,' Altria chairman and CEO Michael Szymanczyk said.
But analysts question whether Ste Michelle would work as part of the much larger Altria corporation, paving the way for a quick sale which could be worth as much as US$800m.
Ste Michelle is the fastest-growing top ten wine company in the US, selling more than 30m bottles annually and netting US$354m in sales last year – making it the fastest-growing division in UST.
A sale would spark interest among wine industry heavyweights, with Constellation Brands likely to be at the head of the queue. Diageo, Brown-Forman and Pernod Ricard have also been named as possible buyers.
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