Treasury Wine Estates has denied it has any plan to sell its US wine business, after Constellation Brands was the latest rival reported to have weighed up a bid.
Treasury’s shares rose by 2.5% on the Australian stock exchange after the Australian Financial Review reported that Constellation Brands had considered a move for its rival in the US.
Treasury’s share price hit A$4.11 by the end of trading in Australia today (15 May), its highest price for three months.
It is the second time in as many months that Treasury has seen its shares spike on takeover speculation, with Pernod Ricard also reported to have shown interest in the Penfolds winemaker’s US division.
However, Treasury said today that it has ‘no intention of selling its US operations and sees that market as a key plank of its future growth plans’.
It added that it has had no approach from, or discussion with, Constellation Brands.
Some financial analysts have suggested Treasury should sell the US wine business, which has struggled to generate a profit for several years.
The US becoming the world’s largest wine market by volume in 2013 Last year, according to figures released this week by the International Organisation of Vine & Wine. But, Treasury has been forced to begin destroying millions of dollars-worth of wine in the country, due to oversupply.
The timing of the fresh media interest in Treasury’s long-term future in the US follows comments by Treasury’s new chief executive, Michael Clarke, who earlier this year said that Treasury has too many brands in its global portfolio.
Written by Chris Mercer