The decision by the Sebastiani family to sell their namesake winery rather than conquer their internal divisions will bring to an end a family business that formed Sonoma's wine identity for more than a century.
"This is a benchmark transaction because the Sebastiani name has been synonymous with Sonoma and with California," said Robert Nicholson, principal of International Wine Associates of Healdsburg. "I am sure it was a difficult decision within the family of pioneers in the wine business. But sometimes selling is the right decision."
Don Sebastiani, the 55-year-old son of second-generation winery leader August Sebastiani, confirmed Saturday that the decision to sell the family vineyards was not unanimous. He declined to discuss specifics.
"There were differences of opinion," he said. "We have our differences behind closed doors. When the doors are open again, we come together."
Sale of Sebastiani Vineyards, which had been in the family since 1904, had been rumored to be in the works for some time. But the announcement to employees late Friday of the purchase by the Foley Wine Group of Santa Barbara came as a shock to many veterans of the industry.
"I heard rumors out there, but only got them confirmed when I met friends for our usual Saturday morning breakfast," said vineyard owner Angelo San Giacomo. "I knew August, we grew up together, and that family's been putting our pinot and chardonnay grapes in their wines since 1974."
The sale ends an entanglement of relationships that started to unravel nearly 30 years ago with the death of August Sebastiani, whose Italian immigrant father Samuele Sebastiani founded the winery in 1904.
August's wife, Sylvia Sebastiani, became the powerful matriarch of the family, while elder son Sam Sebastiani stepped in to run the winery in 1980.
After six years, she removed him amid reported concern over his heavy spending on winery promotion and management direction, and gave the reins of power to younger son Don Sebastiani.
Sam Sebastiani went on to found Viansa Winery, which he sold in 2005 to an investment group, and he now spends much of his time on his ranch in Nebraska.
Don Sebastiani parted ways with the family business in 2001, when he formed his own wine venture with his sons, Donny and August Sebastiani.
A sister, Mary Ann Sebastiani Cuneo, and her husband, Richard Cuneo, took over the family winery when Don left.
Richard Cuneo, who is chairman of the board, confirmed the sale Friday night and said the price would not be disclosed. He and Mary Ann Cuneo, who is president and CEO of Sebastiani Vineyards, did not return phone calls Saturday requesting further comment.
Mary Ann Cuneo told the Sonoma Valley Sun that "all of the family agreed this is a good thing. Everyone can go their own way and do their own thing. We are really happy to sell to an individual and not to a corporate takeover. My brothers, Don and Sam, and I are all pleased."
Sam Sebastiani was not available for comment.
"Members of the Sebastiani family are doing their own thing, so to speak," said Nicholson, whose company provides strategic advice to winery clients and has acted as broker in several major North Coast transactions. "Brothers and sisters do go off and do different things in their careers."
Nicholson said the Sebastiani company, like other large independent wineries, was finding it increasingly difficult to compete and was turning to corporate ownership.
"Large independents face challenges in terms of cost of distribution, sales and marketing and that makes it tough for them when their family is competing against the likes of Constellation and Gallo," Nicholson said.
In 2001, when Don Sebastiani was still head of the family business, the Sebastiani winery sold off a huge chunk of its brand names for $295 million to Constellation Brands.
Case production was significantly reduced, and the winery now produces more than 100,000 cases annually, down from about 7 million at its peak. The vineyard's labels include its premium Cherryblock label and other high-quality wines from the Sonoma Valley, Carneros and Russian River and Alexander valleys.
In 2007, it had about 100 employees and annual sales of about $7.5 million, according to Hoover's, a business reporting company.
Don Sebastiani now heads a company that sold 1.7 million cases of wine this year under more than a dozen labels, including the popular Smoking Loon.
He noted that he, his brother and sister all had stints running the family company since their father's death in 1980.
With the sale of Sebastiani Winery, the family is "all very upbeat and hopeful," Don Sebastiani said.
He said he does not personally know the purchaser, Bill Foley, who is president of Fidelity National, a major national insurance company. Foley bought his first vineyard in Santa Barbara County in 1996.
"I've heard nothing but good things about him," Sebastiani said. "I'd love to sit down and break bread with the guy."
Nicholson, who said he knows Foley, described the new Sebastiani owner as "a serious man in the business who will be a good steward of the Sebastiani name."
The wine group owns brands including Foley Estates, Lincourt Vineyards, Firestone Vineyards and Three Rivers Winery.
This is the Foley Wine Group's first purchase in Sonoma County, Nicholson said.
"The reality is that consolidation in the wine industry has been going on for awhile," Nicholson said. "I think the winery business will always have a strong family element to it, because, after all, this is not just Coke and Pepsi."
Staff Writer Kevin McCallum contributed to this report. You can reach Staff Writer Bleys W. Rose at 521-5431 or bleys.rose@pressdemocrat.com.
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