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Highlights
- Bain Capital consortium confirms Accolade Wines and Pernod Ricard merger.
- Australian regulators approve the merger, enhancing market competitiveness.
- Oversupply of red wine continues to challenge profitability in the industry.
The merger of Accolade Wines and wine brands from French company Pernod Ricard, including Jacob’s Creek, is set to create a more competitive and efficient wine group. The consortium leading this merger is headed by Bain Capital, with the combined entity aiming to solidify its position in a challenging wine industry. The Australian Competition and Consumer Commission (ACCC) announced its approval of the deal, signaling that the consolidation will enhance the company's capacity to navigate market difficulties.
The enlarged entity will benefit from improved operational efficiency, according to Bain Capital partner Joshua Hartz. He emphasized that the merger would provide the business with a financially sustainable future. Hartz commented that the combination of Accolade Wines and Pernod Ricard's assets is expected to result in a more stable and resilient operation, helping the group weather industry headwinds.
Accolade Wines owns several prominent brands, including Hardys, Grant Burge, St Hallett, and Mud House. Pernod Ricard, which is contributing its popular Jacob’s Creek brand to the merger, sees this as a strategic move for both companies. Jacob’s Creek, a flagship wine produced in South Australia's Barossa Valley, has been one of the key assets in this deal.
The merger comes at a time when the wine industry is grappling with an oversupply of cheaper red wine, a situation that has weighed on profit margins. Industry experts, including Rabobank, predict that it could take up to two years for the market to rebalance. Despite this, the combined strength of Accolade and Pernod Ricard is anticipated to provide a much-needed boost to competitiveness in both local and global markets.
This merger is viewed as a positive step for both parties, enhancing their ability to address current market conditions and establishing a stronger foundation for future operations. While the oversupply issue remains a challenge, the newly formed entity aims to navigate these difficulties with increased resilience.
The deal approval by the ACCC and the positive outlook from Bain Capital underscores the importance of strategic partnerships in the wine industry. By combining assets, Accolade Wines and Pernod Ricard are positioning themselves for long-term stability in a highly competitive market.
