Liquor company Brown-Forman Corp. said Tuesday that it has agreed to sell its California-based Fetzer Vineyards to Chilean wine producer Vina Concha y Toro S.A. for $238 million.
Louisville-based Brown-Forman said it expects selling Fetzer to increase its full-year earnings by 20 cents to 30 cents per share. Brown-Forman CEO Paul Varga said the sale will let the liquor company concentrate on its best growth prospects.
Brown-Forman's brands include Jack Daniel's Tennessee Whiskey, Southern Comfort and Finlandia vodka.
The sale of its Fetzer holdings is expected to close in April.
Its shares fell $1.11 Tuesday to close at $68.04. They were unchanged after hours.
Brown-Forman announced last December that it was re-examining options for its wine assets based in Hopland, Calif., including a possible sale. The company said it reviewed a range of alternatives and decided that selling was the best course.
Varga said in a statement Tuesday that "we concluded that our company and our shareholders are best served by redirecting our resources to those opportunities around the world which offer stronger growth and higher returns on invested capital."
Shedding the wine operations "will also enable us to more fully focus on our best growth prospects in our most important market, the United States," Varga said.
When Brown-Forman bought Fetzer in 1992 from its founding family, Fetzer was selling nearly 2 million cases a year of wine. By 2010, the division was selling more than 3 million cases.
The sale includes the Fetzer winery, bottling facility and vineyards plus the Fetzer brand and the California-based wine brands Bonterra, Little Black Dress, Jekel, Five Rivers, Bel Arbor, Coldwater Creek and Sanctuary.
Brown-Forman said fiscal 2010 net sales from those assets totaled $156 million, including excise taxes.
The key facilities in the transaction are located in Hopland and employ about 240 people, the company said. The sale also includes a facility in Paso Robles, Calif.
Brown-Forman said the sale does not include the super-premium Sonoma-Cutrer brand or change the company's long-term agency relationship with Korbel California Champagnes.
Founded in 1883, Vina Concha y Toro S.A. currently exports its wines to 135 countries worldwide.
Its portfolio includes brands spanning the price spectrum _ from top-range Don Melchor and Almaviva brands to the flagship brand Casillero del Diablo and stand-alone brands such as Palo Alto and Maycas del Limari.