Treasury Wine Estates (TWE) has announced it is acquiring leading luxury US wine business, Daou Vineyards for $AU1.6 billion.

Founded in 2007 by brothers and co-proprietors Georges and Daniel Daou and based in the US winemaking region of Paso Robles, California, DAOU has been the fastest growing luxury wine brand in the US trade over the past year. It is recognised for its award-winning Cabernet Sauvignon-based PATRIMONY wines.

Its brand home and tasting room on Daou Mountain attracts 90,000 visitors annually, and is complemeted by an integrated digital platform to elevate the consumer experience.

Treasury Wine Estates CEO Tim Ford said: “The US is the world’s largest wine market and we’re beyond thrilled to add Daou to our portfolio, cementing our position as a global luxury wine leader.

“This is a transformative acquisition that accelerates the growth of our luxury portfolio globally and paves the way for new luxury consumer experiences. Daou is an award-winning luxury wine business with an outstanding track record for growth and we have grand plans for Daou to become the next brand with the international scale and luxury credentials of Penfolds. With DAOU, we will be well positioned to connect with a new generation of wine lovers, combining tradition with innovation, culture-led experiences, and global distribution.”

Georges and Daniel Daou, Founders, Daou said: “The last frontier has always been international, and as part of the Treasury Wine Estates portfolio, we have unlocked the potential to be amongst the highest-end wines for consumers to enjoy globally.

“In Treasury Wine Estates, we have found a partner that not only understands the value of our brand and the premium assets we have cultivated but also the importance of ensuring that we maintain a relentless focus on quality and craftsmanship as we step into our future. Both companies are change leaders and by joining forces, we will continue to boldly disrupt the industry and bring the very best in wine and luxury experiences to consumers around the world.”

TWE said the acquisition will transform its business and cement its position as a global luxury wine leader.

The US is the world’s largest luxury wine market, valued at US$4 billion, with luxury wine its fastest growing
segment.

TWE said Daou was a strong complement to its existing portfolio in upper-luxury price points, with the acquisition filling a key portfolio opportunity for Treasury Americas in the US$20-$40 range, as well as strengthens its luxury portfolio in the US$40+ range.

It said the acquisition would strengthen Treasury America’s position as a leading and iconic US luxury wine business,
increasing its presence with both wholesale and retail channel accounts and leveraging the strength of its luxury footprint to drive expansion across the US with plans to launch a Napa-sourced brand tier.

The acquisition, which is expected to be completed by the end of 2023, includes the Daou brand, Daou Mountain Estate and hospitality site, four boutique luxury wineries and around 400 acres of vineyards in the coveted Adelaida District of Paso Robles.

Georges and Daniel Daou will remain engaged and highly involved in the business: Georges as Founder, with Daniel as Founder and Chief Winemaker.

TWE said the acquisition provided the scale to support a future standalone Treasury Americas Luxury division that will be home to brands including DAOU, Frank Family Vineyards, Stags Leap, Beringer, Etude, and Beaulieu Vineyards.

Ford said TWE had been monitoring it closely since acquiring Frank Family Vineyards two years ago.

The acquisition is expected to be completed by the end of CY2023, subject to U.S. anti-trust approval.