ITALY/US: Constellation Brands cuts deal with Ruffino owner
Constellation Brands has agreed to take full ownership of the Ruffino wine business for EUR50m (US$69m), but the vineyards will remain with the Folonari family.
Constellation will also assume around EUR55m of Ruffino debt as part of the deal, it said today (6 October). The acquisition hands Constellation the 50.1% stake in the Ruffino business that it did not already own, although negotiations on the stake sale have proved controversial.
When Constellation acquired a 40% stake in Ruffino in 2004, it signed a deal enabling Ruffino's two remaining shareholders to 'put' their stakes to Constellation at any point in calendar 2010, using an agreed price formula.
Last year, Constellation bought out one of the shareholders, which it did not name, and increased its overall stake to 49.9%. However, in January this year, Constellation stated that it had begun legal proceedings against Ruffino's ruling shareholder, the Folonari family, "alleging various matters which should affect the validity of the put option".
In April, Constellation's CEO, Rob Sands, said that it looked inevitable that the Robert Mondavi winemaker would take ownership of Ruffino, but on "substantially revised terms".
When contacted by just-drinks today, a spokesperson for Constellation would not comment on the legal proceedings. But, she said that Constellation has only agreed to buy the Ruffino brand and related business, including the facility of Pontassieve, near Florence in Italy, where much of the wine is cellared, bottled and warehoused.
"The seven Tuscan Estates of Ruffino, and the approximate 600 hectares of prestigious vineyards located in the most sought-after areas of Tuscany, will remain the property of the Folonari family," she said.
"I am confident that Constellation will leverage its global best practices to take the Ruffino brand to an entirely new level," said Constellation's Sands. The group will install Sandro Sartor as general manager of Ruffino from 1 November. Current Ruffino MD, Adolfo Folonari, will step down but will remain on the Italian wine group's board.
Ruffino has endured a difficult few years and Constellation was forced to report a $25.4m loss on the Italian company's value in its fiscal year to the end of February 2010. Since 2010, however, Ruffino has been one of Constellation's 19 focus brands. It sells 1.3m cases annually and around half of its sales take place in the US.
The final part in Euromonitor's preview of 2012 for now - soft drinks & water will be covered in the coming days - concerns itself with wine. Spiros Malandrakis and Jeremy Cunnington, alcoholics drink...
Earlier this month, the UK arm of Pernod Ricard invited the drinks press pool to a briefing in London to launch its 'Building Premium Wine Brands' scheme. The programme is designed to target off-trade...
Accolade Wines has renewed a sponsorship deal for its Hardys and Echo Falls brands with the television show 'Come Dine With Me'. ...
- Diageo's Q4/FY 2016 results - Preview
- Wine consumption and its health effects
- Diageo's FY performance by region - Focus
- Can craft breweries compete in lager arena?
- Time to take stock of Constellation's Corona
- SABMiller puts brakes on A-B InBev integration
- Diageo names new TR head as Doug Bagley exits
- AB InBev seeks single buyer for European beers
- Diageo sets sights on alcohol-alternative trends
- Gruppo Campari trials Negroni pre-mix
- Global RTD insights - market forecasts, product innovation and consumer trends
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Global travel retail insights - market forecasts, product innovation and consumer trends