Tobacco giant Altria Group finalized an agreement to sell its wine enterprise for $1.2 billion.
RICHMOND — Earlier this month, Altria announced that it will be selling off its entire wine business, Ste. Michelle Wine Estates, to private equity firm Sycamore Partners for a whopping $1.2 billion. This decision comes as the American tobacco giant intends to move away from the manufacture and sale of cigarettes in an attempt to adopt smoking alternatives, including electronic cigarettes, oral products, and cannabis-based products.
According to both companies, Sycamore Partners is a private equity firm working in the food and retail distribution segments.
“We believe the Transaction is an important step in Altria’s value creation for shareholders and allows our management team greater focus on the pursuit of our Vision to responsibly transition adult smokers to a non-combustible future,” said Billy Gifford, Altria Group’s CEO, in a press release on July 9, 2021. “Ste. Michelle and its talented employees have built an outstanding portfolio of premium wine brands, and we wish them future success.”
“The Ste. Michelle leadership team and I look forward to working with the team at Sycamore Partners and believe we are well-positioned to drive the next phase of our growth,” said David Dearie, Ste. Michelle’s president and CEO said in the same release.
Ste. Michelle sells wines from estates in Washington state, Napa Valley in California, and other parts of the United States’ various wine-growing regions. Altria took control of Ste. Michelle when it bought a smokeless tobacco company for $10.4 billion in 2008.
Reuters reported at the beginning of July of 2021 that the deal will close in the second half of this fiscal year.
Unfortunately, Altria has fumbled in investments in the past few years.
Outside of its storied ownership of Ste. Michelle, Altria Group has likely lost more money on its nearly $13 billion investment in former e-cigarette unicorn Juul Labs.
Tobacco firm Philip Morris International also announced around the same time its investment into British bio-pharma company Vectura Group plc.
