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AUS: Dromana looks to acquire and consolidate

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Dromana Estate has introduced a fresh number of initiatives, including some purchases. The Australian wine company said today (3 March) that it has formally written to Authorised Investment Fund indicating its interest in acquiring the 20% of David Traeger Wines and the 50% of the Yarra Valley Joint Venture held by the fund. Authorised is the largest individual shareholder in Dromana.

"It is anticipated that negotiations will be complete prior to the end of March, with the economic benefit of the transaction to apply from 1 January," the company said in a statement. The transaction will be subject to approval by the shareholders of both Dromana and Authorised.

"Post Acquisition the operations of these two entities will be merged with Dromana Estate. The corporate structure of Dromana is to be simplified and the new simplified corporate structure will achieve both operational and cost efficiencies," Dromana Estate said.

The company also said it will be consolidating its operations to its Tuerong Park property on the Mornington Peninsula in Victoria, by the beginning of May. The consolidation will see the vineyard, manufacturing, sales and marketing and administration functions all located at the same site.

The company will continue to operate the David Traeger Cellar Door and Winery at Nagambie in the Goulburn Valley.

The relocation of the office from Collins Street in the CBD of Melbourne to Tuerong Park will achieve substantial savings in terms of rent and operating costs, Dromana said.

Following the completion of the strategic review cost savings have been identified that will reduce total expenditure by A$500,000 in a full twelve month period.

These savings will be achieved through a reduction in staff numbers, the relocating from the Melbourne CBD and other operating cost savings.

These savings will be implemented over the next few months so as not to detract from the company's ability to generate additional sales, Dromana said.


Sectors: Wine

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