TWE buys Daou Vineyards in California for $1 billion

According to Circana Market Advantage, it is the fastest growing luxury wine brand in the United States over the past year.

Treasury Wine Estates (TWE) will pay $900 million up front to buy Daou Vineyards, plus additional payments of up to $100 million. CEO Tim Ford said, "The U.S. is the largest wine market in the world and we couldn't be more excited to add Daou to our portfolio, cementing our position as a global leader in luxury wines. This is a transformational acquisition that will accelerate the growth of our luxury portfolio globally and open up new opportunities for luxury wine consumption. "

Brothers Georges and Daniel Dau founded the winery in the Adelida neighborhood of Paso Robles in 2007. They were born in Lebanon, but their family fled to France after the civil war broke out. The brothers grew up in Paris and Cannes, where they fell in love with wine. They emigrated to the United States when they turned 18 - first Georges, then Daniel four years later - and became engineers. The brothers started a technology company that provided network integration for the medical industry and made enough money to retire in their 30s. However, instead of vacationing, they bought a mountain in Paso Robles, moved into a small trailer on the land and started planting grapes. "We did it with a deep belief that we had found one of the best terroirs for growing cabernet sauvignon and Bordeaux grape varieties," said Daniel Dau. "Nowhere on this planet could we find a place with such a wonderful climate and such wonderful land as Napa and Bordeaux. The high altitude gives us ideal weather conditions for ripening cabernet throughout the year.

The brothers have dedicated 98% of the vineyard to Bordeaux varieties and 2% to Chardonnay. Daniel was the winemaker and Georges handled the commercial side of the business. They began to receive excellent reviews from prestigious critics and sales skyrocketed. The wines are sold in all 50 states and more than 30 countries. The winery is primarily famous for its upscale Patrimony brand, but also produces a wide range of wines in different price ranges.

TWE said the deal "closes a key opportunity for the portfolio" in the $20 to $40 price range, and strengthens its luxury portfolio in the over $40 price category. The company plans to utilize its expertise in global marketing and distribution to increase the Daou winery's exports as well as strengthen its position in the U.S. market. The deal, which is expected to close by the end of this year, includes 162 hectares of vineyards in the Adelida area, four wineries and a hospitality facility. Georges and Daniel will remain "engaged and highly interested in the business," according to a statement from TWE, and Daniel will retain his role as head winemaker. The brothers said in a statement, "The Last Front has always been international and within the TWE portfolio we have unlocked the potential to be one of the most expensive wines to taste around the world. In TWE, we have found a partner that not only understands the value of our brand and the premium assets we have built, but also understands the importance of maintaining an unwavering focus on quality and craftsmanship in our future. "