Australian Winemaker TWE the Most Sought After by Private Equity Firms


Published Date : Aug 11, 2014

Australian winemaker, Treasury Wine Estates (TWE) has received a multi-billion-dollar takeover bid worth A$ 3.4 billion from an international private equity firm, the identity of which has not been disclosed on request. Australia’s TWE is the world’s largest wine producer.

In the beginning of August, the US based private equity giant KKR came up with a renewed bid for TWE. Brands like Rosemount, Lindeman’s and Wolf Blass are owned by TWE. Penfolds, the most popular winemaker of Australia is also headed by TWE. 

KKR entered into a joint venture with the Rhone Group, which is a fellow private equity firm in the US. 

TWE is undergoing restructuring which will lead to almost 175 job cuts in the near future. In 2013, TWE reported revenue worth A$ 1.76 billion on sale of 385 million bottles. This trend has been observed by several private equity firms which is why they want to have business collaboration with TWE. 

Private equity firms see value and scope for growth in the liquor market basically because of higher liquor consumption globally. In June 2013, the TWE Group was compelled to discard away unsellable wine worth A$ 34 million, because of unsatisfactory sale of wine in the US.

Australia has also reported unsatisfactory sale of wine as well and due to austerity drive, there has been lower than expected sale of wine in China too. 

The demand for New Zealand and Australian wines is mainly driven by Asian drinking habits. 

According to sources, despite the global downturns the international wines market continues to see growth.