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Food & drink

Diageo sells wine businesses for £320mln

Whisky maker is selling wine businesses to focus on core spirit markets

Johnnie Walker and Guinness maker Diageo (LON:DGE) is offloading part of its wine business for about £320mln.

Diageo said it was selling US-based Chateau and Estate Wines and UK-based Percy Fox to Treasury Wine Estates.

The deal will leave it with Justerini & Brooks Wine Merchants, the Argentinian wine business of Navarro Correas, the wine brands of Mey Icki and USL, the Chalone brand and assets and the Acacia winery and vineyard.

The move is part of a drive by Diageo to sell off non-core businesses in order to focus on its target spirit markets.

Last week, Diageo sold its 57.87% holding in Jamaican brewer Desnoes & Geddes (D&G) and its 49.99% stake in GAPL, which owns 51% of Guinness Anchor Berhad (GAB) in Malaysia, to Heineken.

Chief executive Ivan Menezes said: "Diageo's strategy is to drive stronger, sustained performance through focus on our core portfolio and today's announcement is another element of that strategy in action. Wine is no longer core to Diageo and this sale gives us greater focus."

Diageo plans to use the cash from the latest sale, which is due to complete by the end of 2015, to reduce debt.

After the sale, Diageo will have released £1bn from selling non-core assets since the start of the financial year.

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