Brown-Forman this week agreed to sell Sonoma-Cutrer Vineyards to The Duckhorn Portfolio.
In exchange, Brown-Forman will receive an ownership percentage of approximately 21.5% in Duckhorn (valued at approximately $350 million), as well as $50 million in cash consideration.
The transaction, subject to customary closing adjustments and conditions, is expected to close in the fourth quarter of fiscal year 2024.
“We are delighted to welcome Sonoma-Cutrer Vineyards into The Duckhorn Portfolio,” says Deirdre Mahlan, Duckhorn’s Interim President, Chief Executive Officer and Chairperson. “Sonoma-Cutrer is among the fastest-growing major brands in the luxury chardonnay category. We see opportunity to further accelerate that growth and enhance operating margins of the combined business. This transaction expands our presence and visibility, diversifies our portfolio of luxury American winery brands, and dramatically increases our position in the luxury chardonnay category.”
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 receive two seats on The Duckhorn Portfolio’s Board of Directors.
“The Duckhorn Portfolio has a strong reputation for producing and marketing some of the world’s finest wines,” says Lawson Whiting, President and Chief Executive Officer, Brown-Forman Corporation. “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.”
Whiting adds, “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.”
Sonoma-Cutrer Vineyards was founded in 1973 and released its first wine in 1981. The brand owns six estate vineyards spanning 1,121 acres in both the Russian River Valley and Sonoma Coast appellations. Brown-Forman purchased the vineyards and brand trademarks in 1999. Sonoma-Cutrer is now the third-largest luxury chardonnay brand in the U.S. by retail sales, and the fastest growing major brand in the category, according to Circana, formerly IRI.
Brown-Forman’s financial advisor is Greenhill & Co., LLC and its legal advisors are Gibson, Dunn & Crutcher LLP and Coblentz Patch Duffy & Bass LLP.