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BRIEF-Treasury Wine Estates announces acquisition of Diageo's wine business

Published 14/10/2015, 09:05 am
© Reuters.  BRIEF-Treasury Wine Estates announces acquisition of Diageo's wine business
DGE
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TWE
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Oct 14 (Reuters) - Treasury Wine Estates Ltd TWE.AX :

* Twe announces acquisition of diageo's wine business TWE.AX

* Deal for for a cash payment of US$552 million

* Says agreed to acquire the majority of assets from Diageo (L:DGE) plc's US and UK wine operations

* Says total annual cash synergies of at least US$25 million (A$34 million) expected before fy20

* Says twe expects to fund the acquisition via a fully underwritten 2 for 15 pro-rata accelerated renounceable entitlement offer

* Says expected to enhance both roce and ebits3 margin before fy20 as results and synergies are delivered

* Is expected to deliver twe low double digit percent eps accretion in first FY following the acquisition (FY 2017) including phased synergies

* Acquisition is expected to immediately double twe's americas luxury and masstige net sales revenue

* Says twe expects FY 2016 ebits to be in the range of A$270 million - A$290 million, prior to the impact of the acquisition

* Says "also announces an improved financial outlook"

* First FY of trading following completion of acquisition, expects 75% of gross profit from acquired Diageo wine business will be luxury and masstige

* Deal also includes assumption of capitalised leases of US$48 million

* Source text for Eikon ID:nASX7yH30t

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