French wine and spirits giant Pernod Ricard, whose brands include Absolut vodka and Beefeater gin, has agreed to purchase Kenwood Vineyards from Guerneville sparkling winemaker F. Korbel & Bros.
Pernod Ricard USA, the largest subsidiary of the Paris-based conglomerate, announced a deal Thursday to purchase the iconic Sonoma Valley winery for an undisclosed sum. The sale is expected to close by June 30.
Kenwood is the first California still winery purchased by Pernod Ricard, which also owns Napa Valley sparkling wine producer Mumm Napa. The acquisition will give the world's second-largest wine and spirits producer its first property in Sonoma County as it works to expand its presence in the lucrative U.S. beverage market.
Pernod Ricard has the resources "to make things happen at Kenwood," said Eileen Fredrikson, a partner in Gomberg, Fredrikson and Associates, a Woodside wine industry consulting firm.
"Kenwood is a classic brand with wonderful properties," Fredrikson said. The purchase is "very much in keeping with (Pernod Ricard's) strategic moves."
The sale was estimated by Reuters at less than $100 million. The news service quoted Pernod Ricard Chief Financial Officer Gilles Bogaert as saying the company is open to other "tactical acquisitions of premium brands such as Kenwood."
Founded in 1970, Kenwood Vineyards became one of the most visible wineries in the Sonoma Valley. Founders John Sheela and his brothers-in-law, Mike and Marty Lee, converted the old Pagani Brothers jug wine facility off Highway 12 into a modern winery focusing on award-winning varietals, a transformation that mirrored the evolution of the county's premium wine industry in the '70s and '80s.
Korbel acquired a 50 percent stake in the winery in 1996 and bought out the founders three years later. Under Korbel owner Gary Heck's management, Kenwood nearly doubled in size, growing from less than 300,000 cases in 1999 to more than 500,000 cases.
Created in 1975 by the merger of two businesses, Pernod Ricard owns such widely known brands as Martell Cognac, Chivas Regal Scotch whisky, G.M. Mumm champagne and Kahl?a liqueur. Its premium wines include Jacob's Creek in Australia, Brancott Estate in New Zealand, Campo Viejo in Spain and Graffigna in Argentina.
The company's other wine holdings include Dead Bolt, a new brand that is produced in Hopland from California grapes.