Australia's Cockatoo Ridge Wines is set to acquire a bulk wine producer in the country.

Cockatoo said it has reached agreement with Australian Commercial Wines (ACW) to buy the privately-owned bulk wine producer. ACW produces bulk wine for export markets and owns a winery in South Australia, which produces 25,000 tonnes a year and has 25m litres of storage capacity.

"Cockatoo is acquiring 100% of ACW through the issue of new shares to ACW shareholders valued at A$12m (US$9.4m)," the company said.

Cockatoo said it would also issue ACW shareholders with a further A$12m worth of shares in the company that are "conditional on ACW achieving earnings targets" for the next two financial years.

The company also said today (22 December) that it plans to introduce a third placement of shares, again worth A$12m, to help reduce debt.

The company said it would seek approval from shareholders for the placement at a general meeting to be held "as soon as possible".

In March, Cockatoo posted a 42% plunge in half-year profits as the wine glut took hold. Profit for the six months to 31 December 2005 came in at A$1.3m, while revenue leapt in the opposite direction, by 61% at A$17.6m.