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Yellow Tail owner to buy Peter Lehmann Wines

Yellow Tail wines owner Casella has agreed to buy rival Australian wine group Peter Lehmann in a deal that values the company at A$70m.

Donald Hess, chairman of Hess Family Wine Estates

Family-owned Casella has agreed to pay A$1.5 per share to acquire Hess Group‘s 85.7% stake in Peter Lehmann Wines. Margaret Lehmann, the wife of the late Peter Lehmann himself, has also accepted the same amount for her 10.8% of shares in the group, which means Casella is believed to paying close to A$60m.

The remaining shareholders were not disclosed, but Casella said it intends to take 100% ownership of Peter Lehmann.

Its move is evidence of consolidation in an Australian wine industry that has seen profitability severely tested.

Earlier this week, Penfolds owner Treasury Wine Estates announced it would close the historic Ryecroft winery in McLaren Vale in order to cut costs.

The Lehmann deal also reflected a turbulent decade for Australia’s wine industry. Hess acquired its majority stake in the business in 2003 in a deal worth approximately A$150m, according to reports at the time.

Toby Langley, of Gaetjens Langley, which advised Hess on the deal, said there had been ‘significant interest’ in the Lehmann business.

‘After receiving several unsolicited bids, the opportunity arose to implement a competitive bid process,’ said Peter Lehmann’s chairman, Christoph Ehrbar.

Langley said the corporate ethos of Casella and Lehmann is very similar, which helped to secure the deal.

‘This transaction signals a key milestone in the improving fortunes of Australian wine,’ he said.

Gaetjens Langley said it had already overseen sales of premium wine businesses in Coonawarra, Barossa’s Eden Valley and Margaret River this year.

Written by Chris Mercer

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