Drinks giant Diageo agreed today to acquire The Chalone Wine Group for $260 million in cash after seeing off a rival bid from a French luxury wine maker.
Diageo is to pay $14.25 a share for for the Napa-based Californian wine group Chalone and expects the transaction to be completed in the first quarter of 2005, the group said in a statement.
Diageo shares rose 0.8 per cent to 734 pence in London today, while Chalone shares closed on Friday at $14.08 a share.
Diageo entered the fray over Chalone last week by topping a initial agreed bid of $158.4 million, or $11.75 a share, from a group led by Domaines Barons de Rothschild, and including the world's largest winemaker - Constellation Brands Inc.
Diageo, which already owns two Napa Valley vineyards, Beaulieu and Sterling - and the Blossom Hill California wine brand - said the purchase will give "significant synergies" and contribute to profits by the third year of ownership.