By Jorge Mercado Thursday, November 2nd, 2023

Daou Vineyards, located in Paso Robles, is now a part of one of the largest deals in the region in 2023 after announcing that it would be sold to an Australian wine estate for as much as $1 billion.

Owned by Georges and Daniel Daou, the vineyard was sold to Australia’s Treasury Wine Estates, one of the largest vintners in the world.

According to details of the transaction, the deal includes an initial payout of $900 million with an additional $100 million to be paid out if Daou reaches certain goals.

The acquisition also includes the Daou brand, Daou Mountain Estate and hospitality site located at 2777 Hidden Mountain Rd. in Paso Robles, four luxury wineries and around 400 acres of vineyard in the Adelaida district of Paso Robles.

The deal is expected to close at the end of 2023 with both brothers, Georges and Daniel, remaining involved in the business with Georges as founder and Daniel as founder and chief winemaker, according to the press release.

The news helps paint the importance of the Paso Robles wine scene on a much larger scale as well.

In a statement to the Business Times, Joel Peterson, executive director of the Paso Robles Wine County Allegiance, said this acquisition is “the most recent example of power and potential of this incredible wine region.”

“The national success of the DAOU brand, the experience they offer guests, and the attention they’ve helped bring to Paso Wine Country is impressive,” Peterson said.

Both brothers also hope to continue “boldly disrupting the industry” through this acquisition.

“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,” the Dauo brothers said in a press release. 

“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.”

Being a part of one of the largest vintners in the world will also give the region a more international presence.

“With the international focus that Treasury Wine Estates brings, it appears to be a positive development for Paso Robles, which continues to be recognized with commercial success and critical acclaim,” Peterson said.

For Treasury, this deal fills a key portfolio area in the $20 to $40 per bottle category while also strengthening its luxury portfolio which includes bottles in the $40 and up range.

Treasury Wine has a market value of $5.56 billion as of Oct. 31.

According to the press release, Daou is the fastest-growing luxury wine brand in the United States over the past year and has been recognized throughout the industry with multiple awards.

Data from Impact Databank shows that Daou expanded sales from 305,000 cases to 509,000 cases last year. The brand is most known for its Cabernet Sauvignon-based Patrimony wines.

“The U.S. 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 will accelerate the growth of our luxury portfolio globally and paves the way for new luxury consumer experiences,” Tim Ford, CEO of Treasury Wine Estates, said in a press release.

“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.” 

TWE’s financial advisor for this transaction is PJT Partners and its legal advisor is Davis Wright Tremaine. 

Daou’s financial advisor is Centerview Partners LLC and its legal advisor is Sheppard Mullin.

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