Diageo has sold most of its Napa Valley assets and will lease them back from a real estate investment trust. Wine operations will not be affected.
“We know that to remain competitive in this environment we need to rethink our whole wine business to be more nimble and entrepreneurial,” said Zsoka McDonald, a company spokeswoman. “This is about ensuring the long-term strength of our North America wine business and the health of our core wine brands.”
The real estate and winery bubble has burst, and there are persistent rumors of excellent properties on sale at low, low prices. It is, as they say, a buyer’s market.
The lease-back deal frees-up $290 million in cash, which Diageo can use to acquire new properties and brands, if it wants.
I’m guessing Diageo wants.