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TWE buys Daou Vineyards in California for $1bn

It is the fastest-growing luxury wine brand in the United States over the past year, according to data from Circana Market Advantage.

Treasury Wine Estates (TWE) will pay $900m up front to purchase Daou Vineyards, plus an additional earn-out of up to $100m.

CEO Tim Ford said: ‘The US is the world’s largest wine market and we’re beyond thrilled to add Daou to our portfolio, cementing our position as a global luxury wine leader.

‘This is a transformative acquisition that will accelerate the growth of our luxury portfolio globally and paves the way for new luxury consumer experiences.’

Brothers Georges and Daniel Daou founded the estate in the Adelaida District of Paso Robles back in 2007.

They were born in Lebanon, but their family fled to France after civil war erupted. The brothers grew up in Paris and Cannes, where they developed a love of wine.

They emigrated to the United States when they turned 18 – Georges first and then Daniel four years later – and became engineers.

The brothers founded a tech company, which provided network integration for the healthcare industry, and they earned enough money to retire in their 30s.

However, instead of taking it easy, they bought a mountain in Paso Robles, moved into a small trailer on the land and began planting vines.

‘We did that with a very strong belief that we had encountered one of the world’s greatest terroirs for growing Cabernet Sauvignon and Bordeaux varieties,’ said Daniel Daou.

‘Nowhere else on this planet have we been able to find a place that has the great climate of Napa and the great soils of Bordeaux. Because of the high elevation, we tend to have perfect weather to ripen Cabernet throughout the year.’

The brothers devoted 98% of the estate to Bordeaux varieties and 2% to Chardonnay , with Daniel serving as the winemaker and Georges handling the commercial side of the business.

They began earning 98-point, 99-point and 100-point reviews from esteemed critics, and sales soared. The wines are sold in all 50 states and more than 30 export markets around the world.

The estate is primarily famous for its high-end Patrimony label, but it produces a wide range of wines at different price points.

TWE said that the deal ‘fills a key portfolio opportunity’ in the $20 to $40 price range, while also strengthening its luxury portfolio in the $40-plus tier.

The company plans to use its global marketing and distribution expertise to increase exports of Daou Vineyards, while also strengthening its position in the US market.

The acquisition, which is expected to complete before the end of this year, includes 162ha of vineyards in the Adelaida District, four wineries and a hospitality site.

Georges and Daniel will remain ‘engaged and highly involved in the business’, according to TWE, and Daniel will retain his role as the chief winemaker.

The brothers said in a statement: ‘The last frontier has always been international, and as part of the TWE portfolio, we have unlocked the potential to be among the highest-end wines for consumers to enjoy globally.

‘In TWE, we have found a partner that not only understands the value of our brand and the premium assets we have cultivated but also the importance of ensuring that we maintain a relentless focus on quality and craftsmanship as we step into our future.’

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The post TWE buys Daou Vineyards in California for $1bn appeared first on Decanter.

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