Brown-Forman is to sell Sonoma-Cutrer Vineyards and related brand trademarks to The Duckhorn Portfolio in return for an approximate 21.5% ownership percentage in the premier US wine group and US$50 million.
The transaction, subject to customary closing adjustments and conditions, is expected to close in the fourth quarter of fiscal year 2024.
“The Duckhorn Portfolio has a strong reputation for producing and marketing some of the world’s finest wines,” said Brown-Forman Corporation President and Chief Executive Officer Lawson Whiting.
“Their understanding of the wine consumer, combined with a strong and diverse route to market, give Brown-Forman great confidence that Sonoma-Cutrer will continue to grow and thrive as part of the larger Duckhorn portfolio.
“Adding Sonoma-Cutrer to the Duckhorn portfolio will enhance one of the most respected wine portfolios in the industry. Moreover, we believe an equity stake in The Duckhorn Portfolio will be a valuable investment for Brown-Forman, allowing us to maintain a presence in the wine category while focusing resources on building our premium and super-premium spirits brands.”
Under the terms of the agreement, the Sonoma-Cutrer brand trademarks, facilities, and six vineyards in two appellations will join The Duckhorn Portfolio’s fine wine brands. Upon closing, Brown-Forman will take two seats on The Duckhorn Portfolio’s Board of Directors.
The Duckhorn Portfolio’s Interim President, Chief Executive Officer and Chairperson Deirdre Mahlan commented, “Sonoma-Cutrer has a long history of excellence in crafting fine wines and will be an outstanding addition to our portfolio of luxury wines. We will be fortunate to welcome Brown-Forman, a storied industry leader, as a long-term shareholder and look forward to their representation on our board.”
Sonoma-Cutrer produces some of California’s best-known Chardonnays among other wines. Brown-Forman purchased the vineyards and brand trademarks in 1999. Sonoma-Cutrer is now the third-largest luxury Chardonnay brand in the US by retail sales and the fastest-growing major brand in the category, according to Circana, formerly IRI. ✈
